GBP/USD Price Analysis: Dollar Softens Post PPI, Eyes On CPI

The GBP/USD price analysis shows bullish optimism as the dollar falters in the aftermath of the US wholesale inflation report. All eyes are now on the imminent release of US consumer inflation data. Meanwhile, the pound recovered after diving due to dovish policy remarks.On Tuesday, the US released hotter-than-expected Producer Price Index (PPI) figures, indicating still-high inflation in the country. Wholesale inflation rose 0.5% in April, beating forecasts for a 0.3% increase. After the report, markets lowered expectations for Fed rate cuts. Currently, investors expect only 44 basis points of cuts in 2024. The report initially led to a spike in the dollar. However, the move later reversed, showing investors had priced in such an outcome. Therefore, when it happened, they were ready to book profits, leading to a dollar decline. Investors are now waiting for the CPI report.Meanwhile, in the UK, employment data revealed strength in the labor market. However, there were signs that conditions were easing, which would allow the Bank of England to start cutting interest rates. Notably, wages minus bonuses grew by 6.0% in the first quarter of 2024 compared to the same period last year. This was above estimates for a 5.9% increase, boosting the pound. However, there was a reversal in gains when Bank of England economist Huw Pill said that the central bank might be ready to cut rates by summer.  GBP/USD key events today

  • US CPI report
  • US retail sales report
  • Empire State Manufacturing Index
  •  GBP/USD technical price analysis: Price revisits 1.2600 level with renewed momentumGBP/USD 4-hour chart On the technical side, the GBP/USD price is retesting the 1.2600 resistance level after finding support at the 30-SMA. The bullish bias is strong, with the price well above the SMA and the RSI near the overbought region.The price resumed its bullish trend after finding support at the 0.5% Fib retracement level. Bulls made an engulfing candle, leading to a break above the SMA. After that, they confirmed the new bias by retesting the SMA as support. Therefore, there is a high chance the price will breach 1.2600 and climb to retest the 1.2700 psychological level. More By This Author:EUR/USD Outlook: Euro Steadies Ahead Of US PPI DataEUR/USD Weekly Forecast: Easing US Jobs Market Boosts EuroGBP/SUD Outlook: Pound Rallies On The Heels Of Strong GDP Data


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