Pound Sterling jumps above 1.2900 on soft US Inflation, strong UK GDP growth

• 
  The
  Pound
  Sterling
  performs
  strongly
  on
  faster
  UK
  GDP
  growth
  and
  soft
  US
  Inflation
  data.
• 
  The
  UK
  economy
  expanded
  at
  a
  faster
  pace
  of
  0.4%
  in
  May,
  beating
  an
  estimate
  of
  0.2%.
• 
  US
  annual
  headline
  and
  core
  inflation
  decelerated
  in
  June.

The
Pound

Sterling
(GBP)
surges
above
the
round-level
resistance
of
1.2900 against
the
US
Dollar
(USD)
in
Thursday’s
American session.
The
GBP/USD
pair
strengthens
as
the United
States
(US)

Consumer
Price
Index
(CPI)
for
June
showed
that
price
pressures
softened
more
than
expected
in
June.
Annual
headline
and
core
CPI,
which
strips
off
volatile
food
and
energy
prices,
decelerated
to
3%
and
3.3%,
respectively.
Monthly
headline
inflation
deflated
by
0.1%,
while
economists
forecasted
growth
at
a
similar
pace.
The
core
CPI
grew
at
a
slower
pace
of
0.1%
from
the
estimates
and
the
prior
release
of
0.2%.

Softer-than-expected
US
inflation
data
has
boosted
expectations
of
early
rate
cuts
by
the Federal
Reserve (Fed)
and
has
weighed
heavily
on
the
US
Dollar. The
US
Dollar
Index
(DXY),
which
tracks
the
Greenback’s
value
against
six
major
currencies,
weakens
to
June’s
low
near
104.00.

The
Cable
was
already
upbeat
due
to
multiple
tailwinds,
such
as
weakness
in
the
US
Dollar
due
to
firm
speculation
that
the
Fed will
begin
reducing
interest
rates
in
September
and
an
upbeat

outlook
for
the
British
currency
amid
easing
Bank
of
England’s
(BoE)
early
rate
cut
bets
and
strong
United
Kingdom
(UK)
Gross
Domestic
Product
(GDP)
report
for
May.
The
expectations
for
Fed
rate
cuts
were
higher
as Fed
Chair
Jerome
Powell
signaled
some
disinflation
progress
in
his
semi-annual
Congressional
testimony
comments.
Powell
refrained
from
announcing
a
victory
over
inflation
but
assured
that
policymakers
are
very
focused
on
the
path
toward price
stability.

Daily
digest
market
movers:
Pound
Sterling
rises
strongly on
robust
UK
GDP
growth

• The
  Pound
  Sterling
  outperforms
  its
  major
  peers
  on
  Thursday
  as
  the
  UK
  economy
  grew
  at
  a
  faster
  pace
  in
  May
  and
  the
  maintenance
  of
  a
  hawkish
  stance
  by
  BoE
  policymakers.
  UK’s
  Office
  for
  National
  Statistics
  (ONS)
  has
  reported
  that
  the
  economy
  expanded
  strongly
  by
  0.4%
  from
  the
  estimates
  of
  0.2%
  and
  a
  stagnant
  performance
  recorded
  in
  April.
• The
  UK
  ONS
  also
  showed
  that
  monthly
  Industrial
  and
  Manufacturing
  Production
  grew
  in
  line
  with
  expectations
  after
  contracting
  in
  April,
  while
  annual
  figures
  missed
  estimates.
  Monthly
  Industrial
  and
  Manufacturing
  Production
  rose
  by
  0.2%
  and
  0.4%,
  respectively.
  Annually,
  Industrial
  and
  Manufacturing
  Production
  grew
  at
  a
  slower
  pace
  of
  0.4%
  and
  0.6%,
  respectively.
  The
  factory
  data
  has
  returned
  to
  a
  positive
  trajectory
  after
  contracting
  at
  a
  stronger
  pace
  in
  April,
  suggesting
  a
  strong
  recovery
  in
  the
  domestic
  and
  overall
  demand
  for
  factory
  products.
• Meanwhile,
  Bank
  of
  England
  (BoE)
  policymakers
  have
  pushed
  back
  expectations
  of
  rate
  cuts
  in
  August.
  On
  Wednesday,
  BoE
  policymaker
  Catherine
  Mann
  warned
  that
  the
  decline
  in
  annual
  headline
  inflation
  to
  the
  2%
  target
  was
  merely
  a
  “touch
  and
  go”.
  Mann
  added
  that
  price
  pressures
  could
  rise
  again
  and
  remain above
  the
  required
  rate
  for
  the
  rest
  of
  the
  year.
  She
  indicated
  that
  her
  stance
  would
  remain
  hawkish
  until
  she
  sees
  a
  sustained
  decline
  in
  service
  inflation
  and
  wage
  growth.
• This
  week,
  BoE
  policymaker
  Jonathan
  Haskel
  also
  maintained
  hawkish
  guidance
  on
  interest
  rates
  due
  to
  sticky
  wage
  growth.
  Haskel
  said: “I
  would
  rather
  hold
  rates
  until
  there
  is
  more
  certainty
  that
  underlying
  inflationary
  pressures
  have
  subsided
  sustainably”,
  Reuters
  reported.

Pound
Sterling
Price
Today:

Technical
Analysis:
Pound
Sterling
delivers
inverted
H&S
breakout

The
Pound
Sterling
moves
higher
above
the
round-level
resistance
of
1.2900 against
the
US
Dollar.
The
GBP/USD
pair
is
expected
to
extend
its
upside
after
delivering
a
breakout
of
an inverted
Head
and
Shoulder
(H&S)
formed
on
a
daily
timeframe.
The
neckline
of
the
above-mentioned
chart
pattern
is
plotted
near
1.2850,
and
a
breakout
of
the
H&S
formation
results
in
a
bullish
reversal.

Advancing
20-day
Exponential
Moving
Average
(EMA)
near
1.2747 suggests
that
the
near-term
trend
is
bullish.

The
14-day
Relative
Strength
Index
(RSI)
established
into
the
bullish
range
of
60.00-80.00,
indicating
that
the
momentum
has
leaned
to
the
upside.