GBP/USD EXTENDS BULLISH SEQUENCE FOLLOWING LACKLUSTER UPDATES TO U.S. CONSUMER PRICE INDEX (CPI)
GBP/USD extends the recent series of higher highs & lows as fresh data prints coming out of the U.S. economy dampen bets for four Fed rate-hikes in 2018, and the pair may continue to retrace the decline from earlier this year as it appears to be breaking out of a near-term holding pattern.
Key developments coming out of the U.S. may continue to influence the near-term outlook for GBP/USD as market attention turns to the Federal Open Market Committee (FOMC) interest rate decision on tap for March 21, and the fresh updates to the U.S. Consumer Price Index (CPI) may encourage Chairman Jerome Powell and Co. to deliver a dovish rate-hike especially as the core rate of inflation holds steady at an annualized 1.8% for the third consecutive month in February.
Lackluster data prints coming out of the U.S. economy may encourage a growing number of Fed officials to adopt a less-hawkish tone as ‘a couple of members expressed concern about the outlook for inflation, seeing little evidence of a meaningful improvement in the underlying trend in inflation, measures of inflation expectations, or wage growth.’ As a result, the FOMC may have little choice but to tame expectations for a more aggressive hiking-cycle as the central bank still struggles to achieve the 2% target for inflation.
With that said, topside targets are coming back on the radar for GBP/USD as it snaps the monthly range, and the broader shift in pound-dollar behavior may continue to take shape in 2018 as it appears to be breaking out of a wedge/triangle formation.
GBP/USD DAILY CHART