The British Pound bounces on a hike argument that lost 6-3 in July
Sterling (GBP) has spent Thursday recovering a little of what it lost this week, with GBP/USD trading near 1.3530, roughly a third of a percent higher, after the 50-day Exponential Moving Average (EMA) just under 1.3500 held for a second consecutive session.
British Pound Sterling (GBP) experienced a brief recovery on Thursday, trading near 1.3530, roughly a third of a percent higher, as the 50-day Exponential Moving Average (EMA) held just under 1.3500 for the second consecutive session. The bounce was a relief rally, but a daily close above 1.3550 would indicate a trend change. The Bank of England's chief economist argued for an early rate hike, but the majority argued against it.
July's headline inflation rate of 2.9% surpassed the target, and the Bank's projection expects it to peak near 3.2% in the fourth quarter. The market has heard the same case at every meeting since April without changing the majority's opinion. The Dollar experienced a surge due to expectations of a Bank of Japan hike, and the Pound Sterling became vulnerable to a sell-off.
The decision on the September interest rate hike will be made on September 17, following the release of August inflation figures on September 16. Resistance is at 1.3550, and support is at the 50-day EMA just under 1.3500. A daily close above 1.3550 would invalidate the bounce and reopen the path to 1.3600.
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