After yesterday's powerful bullish momentum, GBP/USD is slightly correcting on Wednesday, which is caused by short-term traders fixing longs. Fundamentally, the dollar will continue to decline following the release of the US inflation report.
In October, the consumer price index slowed from 0.4% to 0.0% (m/m) and from 3.7% to 3.2% (y/y). Despite "hawkish" statements of Jerome Powell made last week, the market realizes that yesterday's report will force the Fed, if not to soften the course of monetary policy, then to announce the end of the cycle of monetary restriction.
Yesterday's UK statistics did not have a noticeable impact on the dynamics of the asset. However, the report of the British labor market showed a decline in wage growth from 8.2% to 7.9%, although analysts were expecting 7.4% Employment fell by 207 thousand, and unemployment remained at 4.2%. The number of vacancies fell by 35k, the largest annual decline on record.
Industrial inflation data will be released in the UK today.
Technical analysis of GBP/USD for today
The Bollinger Bands indicator on daily shows strong growth. The MACD indicator has moved into a positive range and holds a strong buy signal. The Stochastic oscillator has sharply entered the area of maximum values. Chart patterns and candlestick analysis also support buyers
After breaking through the key resistance at 1.2500, we return to buying with the next target at 1.2600. Stop-loss is set at 1.2450.
To enter sales, the pair should consolidate below 1.2450. From here we form short positions with the nearest target at 1.2350. Stop loss will be placed at 1.2500