GBP/USD Price Recovers Above 1.27, Eyes on UK Inflation

• The correction ended above the median line (ml).
• The upper median line (uml) stands as a major target.
• The Canadian CPI should bring some action later today.

The GBP/USD price edged higher in the short term after reaching yesterday’s low of 1.2628. Now, the pair is trading at 1.2713 at the time of writing. It looks probable to hit new highs as the US dollar is overbought for now.

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Fundamentally, the British pound received a helping hand from the UK CBI Industrial Order Expectations indicator, which came in at -23 points versus -28 points expected and was far above -35 points in the previous reporting period.

Later, the US will release the Building Permits and the Housing Starts data. The indicators are expected to report worse data than the previous reporting period. Still, the most important event is the US inflation data. The Consumer Price Index could reveal a 0.1% drop versus the 0.1% growth in the previous reporting period.

Tomorrow, the United Kingdom inflation figures could shake the price. The CPI may announce a 4.3% growth versus the 4.6% growth in the previous reporting period, while Core CPI could announce a 5.6% growth in November, less than the 5.7% in October. Also, the US publishes the CB Consumer Confidence as a high-impact event.

GBP/USD Price Technical Analysis: Bullish Momentum

From a technical point of view, the GBP/USD price was in a short-term corrective phase. It was about to hit the descending pitchfork’s median line (ml), representing a major dynamic support and target.

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Coming back above the weekly pivot point of 1.2660 shows sellers’ exhaustion. Now, it is targeting the 1.2748 level (support turned into resistance). Also, the upper median line (uml) represents a major dynamic resistance. So, it remains to see how it reacts around these obstacles. False breakouts may announce a new sell-off.

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• Source: https://www.forexcrunch.com/blog/2023/12/19/gbp-usd-price-recovers-above-1-27-eyes-on-uk-inflation/