GBP/USD breaks through 1.33 mark, highest since Sept. 2016

13 Sep 2017

The GBP/USD pair was seen building on previous session's UK CPI-led strong gains and moved past the 1.33 handle for the first time since mid-September 2016.

On Tuesday, the British Pound gained strong bullish traction in wake of strong UK inflation reading, with the latest CPI print matching a four-year high level recorded in May. 

The pair extended its upward trajectory through mid-Asian session on Wednesday and was being supported by a modest US Dollar pullback led by N. Korea's latest threat to accelerate its plans to acquire a nuclear weapon, following the new sanctions imposed by the UN. 

Focus would remain on fundamentals, with the scheduled release of UK jobs report later during the European trading session. Investors would be looking for a higher wage figures to continue lifting the British Pound. 

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Against the backdrop of re-acceleration in headline CPI, more robust wage growth inflation would reinforce expectations for a possible hawkish BoE tilt and could act as the next big fundamental catalyst that could turn the sentiment around the GBP. 

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Technical levels to watch

The ongoing momentum is strong enough to lift the pair towards 1.3340-45 resistance area, above which the bullish trajectory could get extended towards even beyond the 1.3400 handle towards Sept. 2016 swing high resistance near mid-1.3400s.

On the flip side, any retracement back below the 1.3300 handle might now find immediate support near 1.3270 level, which if broken could trigger a near-term corrective slide. Below the mentioned support, the pair is likely to drift back towards the 1.3200 handle.

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