TSX gains after CPI shows US inflation rose 3%
GBP/USD closed at 1.3377, with an intraday high of 1.3381 and a low of 1.3364. The pair remains stuck in a narrow range and continues to struggle around its short-term moving averages, reflecting indecision amid mixed global cues. Momentum indicators are tilting mildly bearish, suggesting a potential retest of recent lows if dollar strength persists.
Key Technical Observations
Moving Averages Flattening: The 15-day moving average (1.3397) and 20-day moving average (1.3403) are converging and nearly flat — signalling fading directional momentum. Price remains below both averages, which now act as dynamic resistance around 1.3400–1.3420.
Trend Structure: The broader price structure shows a gradual loss of bullish traction since early April. The pair is carving lower highs and higher lows — a sign of equilibrium before a possible breakdown. The immediate focus is on whether bulls can defend 1.3350, a key short-term support zone.
RSI Momentum: The RSI sits at 45.35, slightly below neutral, indicating mild bearish pressure without being oversold. This reflects a controlled downtrend rather than panic selling, consistent with a slow rotation toward dollar strength.
Price Action: Price has failed multiple times to sustain above 1.3500, confirming that sellers are defending that zone aggressively. The near-term setup favours continued consolidation between 1.3350–1.3450, with downside bias unless the pound closes back above the 20-day average.
Macro & Market Context
Dollar Stability: The US dollar remains supported by steady yields and a cautious Federal Reserve stance, while soft U.K. data and dovish Bank of England expectations continue to limit sterling upside.
U.K. Data & Rate Outlook: Weak U.K. retail and housing data reinforce the view that the BoE may pivot earlier toward rate cuts, keeping the pound under relative pressure compared to other G10 peers.
Risk Sentiment: Risk-on flows have failed to lift sterling meaningfully — suggesting that the pair’s performance is being driven more by relative interest rate expectations than broader market tone.
Key Levels to Watch
- Immediate Resistance: 1.3400–1.3420 – cluster of 15- and 20-day moving averages.
- Next Resistance: 1.3500 – psychological level and prior rejection zone.
- Immediate Support: 1.3350 – short-term pivot and daily base.
- Deeper Support: 1.3250 – next structural low if selling extends.
Bias: Mildly Bearish
The technical setup favours a short-term bearish bias while below 1.3420. A daily close above that zone would neutralize downside risk and open a path to 1.3500, but failure to hold 1.3350 could accelerate weakness toward 1.3250.
Traders can look for sell setups near 1.3400–1.3420, targeting 1.3300–1.3250, with stops above 1.3450. Conversely, any sustained move above 1.3450 would signal that bulls are reclaiming short-term control. RSI and price behaviour suggest that rallies may remain capped until a decisive break above the moving average cluster.
