GBP Under Pressure

GBPUSD has come under fresh selling pressure today as the latest round of UK inflation data failed to inspire optimism. UK CPI in May was seen printing 8.7% on the headline reading above the 8.4% the market was looking for. Core CPI meanwhile, rose to 7.1% from 6.8% prior. With both readings showing a disappointing level of stickiness GBP has sold off today on fresh fears over the health of the UK economy.

With mortgage rates already at multi-decade highs of 6%, this latest round of inflation data suggests that, not only will the BOE be forced to hike rates again this month, the forward guidance is likely to be firmly hawkish also. Growth fears for the UK appear to have now become a more central driver for GBP than BOE expectations. Looking ahead, the focus tomorrow will be on the forward guidance the BOE gives with market’s expecting a firmly hawkish delivery from the bank.

Technical Views

GBPUSD

The rally in GBPUSD saw the market trading up to fresh highs around the 1.28 mark. However, price is now softening in line with weakening momentum studies readings. While 1.2659 holds as support, the focus is on a further push higher towards 1.2992. Below here, however, 1.2437 comes into view as the next support to note.