GBP/USD stays in highs near 1.39 post-CPI
- UK’s CPI at 3.0% YoY in January.
- Cable tested 1.3900 post-data.
- Spot stays bolstered by USD-weakness.
The buying interest around the Sterling has picked up further pace today, taking GBP/USD to print fresh daily highs around the 1.3900 handle.
GBP/USD bid on data
Cable gained extra upside momentum today after UK’s inflation figures showed consumer prices rose at an annualized 3.0% in January (vs. 2.9% expected) and contracted less than initially estimated 0.5% inter-month.
Further data saw consumer prices stripping food and energy costs advancing 2.7% on a yearly basis, also coming in above forecasts.
In the meantime, spot is up for the second session in a row, extending the bounce off last week’s lows in sub-1.3800 levels, or multi-week lows. Despite GBP quickly faded the post-BoE spike to the vicinity of the 1.4100 handle last Thursday, investors continue to adjust their expectations of a probable rate hike by the BoE at the May meeting.
On the positioning front, GBP net longs dropped to 3-week lows in the week to February 6, according to the latest CFTC report.
GBP/USD levels to consider
As of writing, the pair is gaining 0.34% at 1.3885 facing the next hurdle at 1.3985 (10-day sma) followed by 1.4067 (high Feb.8) and finally 1.4280 (high Feb.2). On the downside, a breach of 1.3765 (low Feb.9) would aim for 1.3669 (55-day sma) and then 1.3457 (2018 low Jan.11).
