The US dollar continued to go crazy after the release of Consumer Price Index (CPI) data made other major currencies fall including the Pound.
The annual inflation rate of the United States (US) continued to rise to 9.1% in June 2022 where the increase was the most recent highest since November 1981. The increase was seen to be much worse than expected to increase to 8.8%.
Apart from that, the monthly CPI reading was also seen to increase to 1.3% above the expected 1.1%.
San Francisco Federal Reserve (Fed) President Mary Daly supported an interest rate hike of 75 basis points in July but a hike to 100 basis points is also likely to happen, adding that Richmond Fed President Thomas Barkin also supported a higher rate hike in July.
Investors also did not rule out the possibility that the Federal Reserve (Fed) would make a rise of 75 basis points or in the footsteps of the Bank Of Canada (BOC) had made a rate hike of up to 100 basis points at its policy meeting yesterday.
As for the Pound, investors scrutinized the release of gross domestic product (GDP) data for the United Kingdom (UK) economy which recorded a reading of rising to 0.5% in May, much better than the previous one which contracted -0.2%.
Apart from that, industrial production data in May also increased by 1.4%, while manufacturing production increased by 2.3% above expectations.
Observing the price movement on the chart of the GBP/USD currency pair, the price is seen to decline again after surging in the New York session yesterday with a daily rise of around 140 pips already recorded.
Initially, prices plunged before soaring due to the uncertain reaction of investors during the release of US inflation data.
Continuing the Asian trading session this morning, the price resumed its decline after testing the resistance level at 1.19400, where the price, which fell below the 1.1800 level, moved back below the Moving Average 50 (MA50) barrier level on the 1 -hour movement on the GBP/ USD for bearish signals.
If the price continues to decline, the latest 2 -year low will be recorded again with the target to pass the support zone 1.18000.
Prices that managed to break the zone are expected to continue declining to the level of around 1.16000.
On the other hand if the price makes a rise again, passing the level of 1.18800 will push the price to head back to the zone of 1.19400 to test the resistance again.
And further, for the movement of the bullish trend change, the price will rise higher to the 1.2000 focus level.
