GBPUSD Ticks Higher on Surprise Inflation Reading

The GBPUSD currency pair showcases a compelling narrative amidst recent inflation data from the UK and the US.  

While the Office for National Statistics reported UK inflation surprising slightly to the upside at 3.2%, hinting at the potential prolongation of higher interest rates by the Bank of England, it also indicates a slight dip from the prior month, reflecting the UK’s strides in inflation containment. In contrast, US inflation accelerated to 3.5%, up slightly from the preceding month.  

Despite this, the GBPUSD is trading higher, marking a 33 basis point increase in the trading session, as the British Pound endeavours to rebound from a five-month low against the Greenback. Looking forward, market participants keenly await speeches from policymakers in both nations, with a focus on monetary policy outlook, likely influencing the pair’s short-term trajectory. This interplay of inflation figures, central bank actions, and geopolitical events underscores the dynamic nature of forex markets, captivating investors and analysts alike. 


The GBPUSD’s price action unfolds within a discernible downtrend, underscored by technical indicators signalling a bearish trajectory. Currently positioned below the 100-day moving average, a descending channel pattern validates the pair’s descent, encapsulating market sentiment favouring downside movements. 

At the 1.27078 level, resistance materialized, coinciding with the channel’s upper boundary amid overbought RSI conditions, triggering a subsequent selloff. However, support emerged at the 1.24052 level, aligning with the channel’s lower boundary amid oversold RSI conditions, indicating a potential reversal. 

Presently, a retracement is underway, with the pair retracing to the 23.60% Fibonacci Retracement level. Should upward momentum persist, a breakthrough above this level on high volume could pave the way for further gains, with the 38.20% level becoming a plausible target. Conversely, a resurgence of downside pressures could lead to a retest of the 1.24052 support level, highlighting the importance of key technical levels in navigating market movements.  


Amidst surprise UK inflation readings, the GBPUSD ticks higher, reflecting market dynamics influenced by UK and US economic data. Despite a downtrend, technical analysis suggests potential reversals at key levels, with the pair retracing to the 23.60% Fibonacci level. The market awaits central bank speeches, potentially shaping the short-term trajectory of the pair. 

Sources: Office for National Statistics, Reuters, Trading Economics, TradingView 

Piece Written By Nkosilathi Dube, Trive Financial Market Analyst 

Disclaimer: Trive South Africa (Pty) Ltd (hereinafter referred to as “Trive SA”), with registration number 2005/011130/07, is an authorised Financial Services Provider in terms of the Financial Advisory and Intermediary Services Act, 37 of 2002. Trive SA is authorised and regulated by the South African Financial Sector Conduct Authority (FSCA) and holds FSP number 27231. Trive Financial Services Ltd (hereinafter referred to as “Trive MU”) holds an Investment Dealer (Full-Service Dealer, excluding Underwriting) Licence with licence number GB21026295 pursuant to section 29 of the Securities Act 2005, Rule 4 of the Securities Rules 2007, and the Financial Services Rules 2008. Trive MU is authorized and regulated by the Mauritius Financial Services Commission (FSC) and holds Global Business Licence number GB21026295 under Section 72(6) of the Financial Services Act. Trive SA and Trive MU are collectively known and referred to as “Trive Africa”.

Market and economic conditions are subject to sudden change which may have a material impact on the outcome of financial instruments and may not be suitable for all investors. Trive Africa and its employees assume no liability for any loss or damage (direct, indirect, consequential, or inconsequential) that may be suffered. Please consider the risks involved before you trade or invest. All trades on the Trive Africa platform are subject to the legal terms and conditions to which you agree to be bound. Brand Logos are owned by the respective companies and not by Trive Africa. The use of a company’s brand logo does not represent an endorsement of Trive Africa by the company, nor an endorsement of the company by Trive Africa, nor does it necessarily imply any contractual relationship. Images are for illustrative purposes only and past performance is not necessarily an indication of future performance. No services are offered to stateless persons, persons under the age of 18 years, persons and/or residents of sanctioned countries or any other jurisdiction where the distribution of leveraged instruments is prohibited, and citizens of any state or country where it may be against the law of that country to trade with a South African and/or Mauritius based company and/or where the services are not made available by Trive Africa to hold an account with us. In any case, above all, it is your responsibility to avoid contravening any legislation in the country from where you are at the time.

CFDs and other margin products are complex instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how these products work and whether you can afford to take the high risk of losing your money. Professional clients can lose more than they deposit. See our full Risk Disclosure and Terms of Business for further details. Some or all of the services and products are not offered to citizens or residents of certain jurisdictions where international sanctions or local regulatory requirements restrict or prohibit them.