GBP/USD 5 mins chart
After touching fresh five-week lows earlier just below 1.2600, GBP/USD has reversed higher to 1.2670 now and trading at the highs for the day. It comes after the hotter-than-expected UK inflation data, which is leading to traders paring rate cut bets for the BOE.
The odds of a May rate cut are now at around 58% as compared to roughly 84% at the end of trading yesterday. However, the first rate cut is still primed for June at the moment with total rate cuts for the year seen at around 111 bps. That is just slightly lower from the 116 bps priced in last week here.
Going back to GBP/USD, buyers still have more work to do in order to really convince of a more significant rebound. Looking at near-term levels, the confluence of the 100 an 200-hour moving averages is only seen at 1.2714-16. As such, sellers are still in charge unless buyers can wrestle back some momentum by pushing above that region.