Cable is up 0.4% to 1.2456 and EUR/GBP is also seen down 0.2% to 0.8565 on the day currently. It points to decent albeit light gains for the pound after the UK CPI report earlier here. So, where does the pound go from here?
For starters, the technicals aren’t really changed whatsoever. GBP/USD is still sitting well in range of its recent consolidation after the downside as seen here. And when you drill down into the near-term chart:
GBP/USD hourly chart
It points to buyers seizing back near-term control but there is still decent short-term resistance around 1.2692-00 for the time being. That will be where buyers need to break back above to solidify any notion of a further rebound.
Otherwise, the downside momentum still beckons with the dollar continuing to remain in a modest spot across the board.
As for trying to measure the scope of the pound’s gains today, the BOE pricing says it all:
There isn’t much significant change after the UK CPI report and as mentioned earlier, traders are continuing to draw the line for peak rates at the 6% mark. And that has not changed whatsoever.
A 25 bps move for September is 100% priced in and traders are not getting carried away to significantly price in a 50 bps move (only 7% odds of that now). That suggests that any pound gains coming just from the inflation numbers should not be too significant. But at least the better market mood is helping so far on the day I guess.