Solid News

The pound continues to lose positions against the backdrop of weak macroeconomic data and at the moment GBP/USD is correcting around 1.2039.

Consumer inflation in the UK, the first among developed countries, exceeded the 10% threshold and amounted to 10.1%, rising from 9.4% a month earlier, with a monthly increase of only 0.6%. Even more worrisome is the Core CPI excluding Food and Energy, climbing to 6.2% from 5.8%, catalysing the Bank of England to be more "hawkish" in terms of monetary tightening.

In turn, the US dollar is holding above 106.000 in the USD Index, sagging slightly after yesterday's US Retail Sales data. The index in July fell to 0.0% from 0.8% in the previous month, which disappointed analysts who had expected a rise of 1.0%. Obviously, the continuing decline in Retail Sales is a direct consequence of rising prices, which the US Federal Reserve is unable to seriously influence. The Core Retail Sales Index, in turn, also slowed to 0.4% from 0.9% a month earlier.

GBP/USD continues to trade within the global downward channel, retreating somewhat from the resistance line. Technical indicators are ready to reverse and give a signal for the start of sales: the range of the Alligator indicator EMAs fluctuations is expanding in the direction of decline, and the histogram of the AO oscillator forms descending bars.

Support levels: 1.2000, 1.1756. | Resistance levels: 1.2218, 1.2588.