Markets are watching closely to see which direction the GBP/USD pair will take after its seesawing movement following the U.S. CPI release

Markets are watching the direction of the GBP/USD pair, which has been fluctuating following the U.S. CPI release

11.05.2023

In yesterday’s U.S. currency trading, the dollar saw a seesaw movement against the pound following the release of the U.S. April Consumer Price Index, which showed the core index rising 5.5% year-over-year. The GBP/USD pair surged approximately 70 pips from 1.2604 to 1.2679 before immediately giving up all of those gains.During today’s Asian session, the pair is trading around 1.2602, fluctuating above the 20-period moving average on the hourly chart. On the weekly chart, GBP/USD has some room to fall before reaching the 200-period moving average, so it will be worth watching to see if it rebounds again.

Among European currencies, the euro continued to fall against the yen.The EUR/JPY pair fell by approximately 160 pips from 148.669 to 147.041. The 20-period moving average (MA) on the 4-hour chart acted as resistance. Technically, the EUR/JPY has already broken below the 20-period MA on the daily chart, and the daily RSI has pulled back after touching 70. Therefore, we will be closely monitoring the direction of the euro against the yen during European trading hours to see if it continues to weaken.

Today’s schedule includes Turkey’s current account balance at 4:00 PM, the Bank of England’s (BoE) interest rate decision and statement at 8:00 PM, the BoE’s Quarterly Monetary Policy Report, South Africa’s manufacturing output at 8:00 PM, remarks by BoE Governor Bailey at 8:30 PM, U.S. initial jobless claims and the U.S. Producer Price Index at 9:30 PM, and remarks by Kashkari at 9:45 PM:Remarks by Neel Kashkari, President of the Federal Reserve Bank of Minneapolis; at 11:30 PM, US Weekly Natural Gas Inventories and remarks by Federal Reserve Governor Waller; and at 2:00 AM, a US 30-year Treasury auction. We will be closely monitoring the direction of the GBP/USD pair, which has been fluctuating following the US CPI release.