London, UK – The Pound Sterling (GBP) has demonstrated a swift recovery following the release of persistently high UK Consumer Price Index (CPI) data for December, prompting a delay in expectations for early rate cuts by the Bank of England (BoE). Market analysts anticipate further upside for the GBP/USD pair as investors lean towards the possibility of the Federal Reserve (Fed) initiating interest rate reductions earlier than the BoE.
Concerns loom over the BoE policymakers, who are expected to maintain vigilance given the UK’s vulnerable economic outlook and the resilience of price pressures. The trajectory of the Pound Sterling is poised to be influenced by the upcoming release of December’s Retail Sales data, scheduled for Friday. Positive consumer spending figures would likely diminish the prospects of an early rate cut by the BoE.
Technical Analysis: Pound Sterling Targets 1.2700 Threshold
The Pound Sterling has exhibited a robust recovery, approaching the 1.2700 mark after encountering significant buying interest near a recent monthly low of 1.2600. The GBP/USD pair rebounded strongly following a test of the 50-day Exponential Moving Average (EMA), situated around 1.2620. Challenges persist in surpassing the 20-day EMA, positioned at approximately 1.2700.
The 14-period Relative Strength Index (RSI) has shifted within the 40.00-60.00 range, indicating a relatively subdued performance. Traders and investors will closely monitor these technical indicators as the Pound Sterling navigates its path, assessing the potential for a sustained climb above the critical 1.2700 level.
