GBP/USD remains on the defensive above 1.2420, eyes on UK CPI data

Source Fxstreet
  • GBP/USD attracts some sellers to 1.2430 on the stronger USD. 
  • Fed’s Powell said the US monetary policy needs to be restrictive for longer. 
  • BoE’s Bailey saw strong evidence that UK inflation was falling. 

The GBP/USD pair remains on the defensive around 1.2430 during the early Asian session on Wednesday. The further upside in the US Dollar (USD) from a hawkish tilt by Federal Reserve (Fed) Chair Jerome Powell and upbeat US Retail Sales data weighs on the GBP/USD pair. Investors will take more cues from the UK Consumer Price Index (CPI) on Wednesday. 

The Fed Chair Jerome Powell said on Tuesday that monetary policy needs to be restrictive for longer and further dampen investors' hopes for meaningful rate cuts this year. Powell added that the recent economic data have clearly not given the Fed greater confidence and it's likely to take longer than expected to achieve that confidence. The US central bank has kept its benchmark interest rate in a target range between 5.25% and 5.5% since July 2023. Financial markets have had to reset their expectations for rate cuts this year, with the anticipation of one or two reductions that will not start until September.

On the other hand, investors price in two rate cuts by the Bank of England (BoE) this year, with the first move in August or September and earlier rate cuts than the Fed. This, in turn, has exerted some selling pressure on the Pound Sterling (GBP) and created a headwind for the GBP/USD pair. 

The BoE Governor Andrew Bailey said on Tuesday there was strong evidence that UK inflation was falling and that the question for BoE policymakers remained how much more evidence was necessary before starting to cut interest rates. Bailey further stated that different inflation paths for the US and Europe this year could lead to somewhat different paths for interest rates.

GBP/USD

Overview
Today last price 1.243
Today Daily Change -0.0016
Today Daily Change % -0.13
Today daily open 1.2446
 
Trends
Daily SMA20 1.2615
Daily SMA50 1.2653
Daily SMA100 1.2667
Daily SMA200 1.2582
 
Levels
Previous Daily High 1.2499
Previous Daily Low 1.2436
Previous Weekly High 1.2709
Previous Weekly Low 1.2427
Previous Monthly High 1.2894
Previous Monthly Low 1.2575
Daily Fibonacci 38.2% 1.246
Daily Fibonacci 61.8% 1.2475
Daily Pivot Point S1 1.2421
Daily Pivot Point S2 1.2397
Daily Pivot Point S3 1.2358
Daily Pivot Point R1 1.2484
Daily Pivot Point R2 1.2523
Daily Pivot Point R3 1.2547

 

 

Disclaimer: For information purposes only. Past performance is not indicative of future results.
placeholder
Dollar presses 102 as the 10-year yield sits at 5.14% — and October hike odds are only 17%The dollar index closed at 101.99 (+0.20%) on Monday after briefly topping 102.07, while the 10-year Treasury yield rose to 5.14% and the 2-year hit 4.774% — yet futures price only about a 17% chance of a hike at the October 27-28 FOMC, versus roughly 90% for December. The driver is a global bond selloff, not a Fed repricing: France's 10-year OAT jumped to 4.84% ~ 4.94% and the OAT-Bund spread widened to 140 ~ 146bp. Here are the levels, the cross-asset read-through and what to watch.
Author  Irene Q.
Oct 20, Tue
The dollar index closed at 101.99 (+0.20%) on Monday after briefly topping 102.07, while the 10-year Treasury yield rose to 5.14% and the 2-year hit 4.774% — yet futures price only about a 17% chance of a hike at the October 27-28 FOMC, versus roughly 90% for December. The driver is a global bond selloff, not a Fed repricing: France's 10-year OAT jumped to 4.84% ~ 4.94% and the OAT-Bund spread widened to 140 ~ 146bp. Here are the levels, the cross-asset read-through and what to watch.
placeholder
Meta's AI bill just hit $145 billion — and it issued a new share class to pay for itMeta reported record third-quarter revenue of $64.60 billion, up 26% from a year earlier, and raised full-year 2026 capital expenditure guidance to $135-145 billion from $130-145 billion. To fund that build-out without touching Mark Zuckerberg's voting control, the company announced a 2-for-1 stock split that hands every Class A holder a new non-voting Class C share. Here are the four lines that matter, the peer group that is being re-rated alongside it, and the bull and bear cases.
Author  Irene Q.
Oct 22, Thu
Meta reported record third-quarter revenue of $64.60 billion, up 26% from a year earlier, and raised full-year 2026 capital expenditure guidance to $135-145 billion from $130-145 billion. To fund that build-out without touching Mark Zuckerberg's voting control, the company announced a 2-for-1 stock split that hands every Class A holder a new non-voting Class C share. Here are the four lines that matter, the peer group that is being re-rated alongside it, and the bull and bear cases.
placeholder
The Fed will sit still on October 28 — but 100 of 100 economists now expect a December hikeA Reuters poll run October 16-20 found 94 of 100 economists expecting the Fed to hold at 3.75-4.00% on October 28 — and all 100 expecting a hike in December, against less than half a month earlier. The market is close to the same price, with CME FedWatch at roughly 17% for October and 82.8% for December. With the Fed in blackout since October 17, here are the five dates that decide the rest of the year, what each one is priced for, and the two directions each can take.
Author  Irene Q.
Oct 22, Thu
A Reuters poll run October 16-20 found 94 of 100 economists expecting the Fed to hold at 3.75-4.00% on October 28 — and all 100 expecting a hike in December, against less than half a month earlier. The market is close to the same price, with CME FedWatch at roughly 17% for October and 82.8% for December. With the Fed in blackout since October 17, here are the five dates that decide the rest of the year, what each one is priced for, and the two directions each can take.
placeholder
Gold Price Analysis Today | Forex Gold Analysis | XAU/USD Analysis - October 23, 2026Get the latest gold price analysis, forex gold insights, and XAU/USD analysis for October 23, 2026. Read on for the details.
Author  Mitrade
Yesterday 02: 56
Get the latest gold price analysis, forex gold insights, and XAU/USD analysis for October 23, 2026. Read on for the details.
placeholder
Nasdaq closes at 26,008.86 — 8.9 points above 26,000, and the credit market never blinkedThe Nasdaq Composite fell 2.60% to 26,008.86 on October 22, its worst session since June, as Meta sank 6.98% on 2026 capex guidance of $135–145 billion. But the equal-weight S&P 500 rose 0.73%, high-yield credit was flat and 10-year yields fell 20 basis points. This was an AI de-rating, not a risk-off event — here is the transmission chain, the 29,000 / 28,200 levels and what would prove it wrong.
Author  Irene Q.
Yesterday 06: 39
The Nasdaq Composite fell 2.60% to 26,008.86 on October 22, its worst session since June, as Meta sank 6.98% on 2026 capex guidance of $135–145 billion. But the equal-weight S&P 500 rose 0.73%, high-yield credit was flat and 10-year yields fell 20 basis points. This was an AI de-rating, not a risk-off event — here is the transmission chain, the 29,000 / 28,200 levels and what would prove it wrong.
Related Instrument
goTop
quote