GBP/USD consolidates around 1.2350 as market participants digest United Kingdom´s latest news. Risk-off flows prevent the Pound from gaining upward traction, as global equities maintain the bearish route.

The tops marked during Monday and Tuesday, around 1.2290, offer nearly support to the quote. 

On the United Kingdom front, inflationary pressures have softened as per the December’s Consumer Price Index (CPI) report, released on Wednesday. The headline inflation has been eased to 10.5% on an annual basis and the core CPI that excludes oil and food prices remained steady at 6.3%. The extent of the decline in the inflation rate is not sufficient to infuse confidence among the market participants that UK inflation is easing on a promising note. Therefore, investors should brace of continuation extreme hawkish monetary policy by the bank of England (BoE) ahead.However, a convergence of the 100-Hour Moving Average (HMA) and an ascending trend line from January 06, close to 1.2250 by the press time, could challenge the GBP/USD bears afterward.

In a case where the pair remains bearish past the 1.2250 support confluence, the 200-HMA level near the 1.2200 round figure could act as the final defense of the GBP/USD buyers.

Alternatively, recovery moves need to cross the support-turned-resistance line stretched from Tuesday, close to 1.2350 by the press time.

Following that, a run-up towards the 1.2400 round figure and the recent peak surrounding 1.2435 can’t be ruled out. It should be observed that the previous monthly peak near 1.2450 will act as an additional upside filter to watch for the GBP/USD bulls.

Expecting a pullback on Pound from the daily orderblock

Jan 19 2023