Despite the higher-than-expected CPI, should we keep an eye on the pound’s performance against the U.S. dollar, which has weakened?

Despite the higher-than-expected CPI, should we keep an eye on the pound’s performance against the U.S. dollar, which has weakened?

15.08.2024

In U.S. currency trading the previous day, the Canadian dollar strengthened against Oceania currencies. The AUD/CAD pair fell from 0.9105 to 0.9035, marking a pullback from this month’s high.On the 4-hour chart, the pair has pulled back from the 200-period SMA, and on the daily chart, it failed to break above the level just below the 20-period MA and was pushed back down. We will need to monitor price action during U.S. trading hours to see if the Canadian dollar will continue to strengthen against the Australian dollar.

European currencies saw the pound weaken against the U.S. dollar, despite yesterday’s release of the UK’s July Consumer Price Index, which showed a year-over-year increase from 2.0% the previous month to 2.2%. The GBP/USD pair fell from 1.2868 to 1.2815.On the hourly chart, the price has moved from above the 20-period moving average (MA) to below it. On the 4-hour chart, the price has pulled back from the +3σ level of the Bollinger Bands, and on the daily chart, the RSI has declined from 54 to 51.

Today’s schedule includes Japan’s real GDP at 8:50, China’s new home sales prices and Australia’s employment statistics at 10:30, China’s industrial production and retail sales at 11:00, the UK’s industrial production at 15:00, Switzerland’s trade balance at 15:30,at 9:30 p.m., Canadian wholesale sales, U.S. initial jobless claims, U.S. retail sales, U.S. import price index, and the U.S. Philadelphia Fed Manufacturing Index; and at 11:00 p.m., the U.S. NAHB Housing Price Index and U.S. business inventories.We will closely monitor the pound’s performance against the U.S. dollar, even as the CPI came in higher than expected.