- The GBP/USD price analysis suggests a longer delay in Bank of England rate cuts.
- Inflation in the UK accelerated from 3.6% to 3.8%.
- Traders are awaiting the FOMC minutes.
The GBP/USD price analysis suggests a longer delay in Bank of England rate cuts as UK inflation remains high. As a result, the pound recovered from its previous day’s decline. Meanwhile, the US dollar held steady against most of its peers ahead of the FOMC minutes and the Jackson Hole symposium.
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Data on Wednesday revealed that inflation in the UK accelerated from 3.6% to 3.8%. Meanwhile, economists were expecting inflation to increase by 3.7%. Services inflation also came in higher than expected. The upbeat figures will ease pressure on the Bank of England to cut interest rates.
Already, more policymakers were ready to pause at the last meeting. With this report, the next cut might come next year.
“The economy is experiencing a bout of high inflation and weak growth that will likely remain until next spring,” said Deloitte Chief Economist Ian Stewart. He said it was unclear whether the BoE would cut rates again in 2025.
Meanwhile, traders are awaiting the FOMC minutes. However, they might not be as useful as the meeting came before the July jobs report. Meanwhile, Powell might give policy clues at the Jackson Hole symposium.
GBP/USD key events today
GBP/USD technical price analysis: Price rebounds after hitting new low
On the technical side, the GBP/USD price has rebounded after a recent decline. However, it still trades below the 30-SMA, with the RSI under 50, suggesting a bearish bias. The price has made a new low below the 30-SMA, a sign that bears are finding their feet. However, the price suddenly made a strong bullish candle that could lead to a pullback to the 30-SMA.
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Although bears have taken the lead, they haven’t yet retested the SMA as a resistance. If it holds firm, the downtrend will continue with a new low. However, if the SMA gives way, the price will retest the 1.3575 resistance level.
If bears remain in the lead, the price will likely drop to the 1.3401 support level. On the other hand, a break above the SMA would signal a shift in sentiment that could allow the previous uptrend to continue.
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