The Greenback ended the day with a clear bullish statement yesterday after the release of the higher-than-expected CPI data, distancing any hopes of June rate cuts. In the UK, on the other hand, the possibility of June rate cuts is very likely.
Key Points
- The US CPI came in stronger than expected yesterday, infusing a bullish charge on the Greenback.
- President Biden said rate cuts, though could still happen this year, may be delayed.
- The price currently hangs on the 1.2539 as a key level.
GBP/USD Daily Price Analysis – 11/04/2024
A heavy bearish pressure fell on the GBP/USD yesterday after the US CPI data caused the price to close at a loss of 1.08%. So far today, the price has dipped a little more by 0.06% in the London session.
The US Bureau of Statistics reported strong inflation data yesterday, coming in at 3.5%, higher than the anticipated 3.4% and the previous year’s 3.2%. This strong report saw the Greenback go extremely bullish across the board. The DXY, an index that tracks the strength of the dollar against other major currencies, spiked by 1.04% following the release.
Against that backdrop, the CME FedWatch tool suggests that June rate cuts are now more likely to be delayed. In fact, the probability of a rate cut will not surpass 50% again until September. President Biden also said yesterday that he still expects a Fed rate cut this year, but it may be delayed.
June rate cuts are still on the table, though, across the Atlantic. The United Kingdom’s monthly gross GDP is set to be released on Friday. Any signs of dovishness could inflict some bearish pressure on the pound, potentially dragging the GBPUSD further down.
On the technical front, yesterday’s dip pushed the price below the 50 EMA, while the RSI also dipped into the bearish half of the divide. A break below the crucial support level of 1.2529 could significantly push the pair’s price lower.
GBP/USD Technical Analysis – 11/04/2024
The CPI report caused the pair to dip to 1.25202, a few pips short of its lowest price point in 2024 (1.25184). This strong bearish slide, however, has only brought the price within the daily range established in November 2023.
If we see a break past the 2024 low, the price may dip further to the 1.25029 support level and below that. On the other hand, the impulsive movement to the downside has only left a series of resistance levels behind, including 1.25753, 1.26116, 1.26389, and 1.26683.
Overall, fundamentally and technically, the GBP/USD is heading lower. If the trend continues, the focus should be on the following price levels: 1.2529, 1.2518, and 1.2486.
Key Economic Data and News to Be Released Today
Investors will gear up for the PPI news release later today. While this report may not cause as much fuss as yesterday’s CPI, investors will still look to glean insights into the strength of the US economy. If the report comes in better than expected, it may lend more credence to the Greenback.
GBP/USD Key Pivot Point Price Levels 11/04/2024
The key daily Pivot Point Price levels for the GBP/USD are these:
| S2 | S1 | Pivot Point | R1 | R2 |
| 1.24766 | 1.25575 | 1.26205 | 1.27014 | 1.27644 |
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