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The British pound currency is testing towards the 1.3300 resistance level against the US dollar as risk-on assets, such as US technology related stocks, continue to rally, further underpinning the bid-tone in the GBPUSD pair.
Later today, UK inflation data should just reaffirm stronger price pressures to start the year – which justifies the current policy path by the BOE. This CPI number could cause the GBPUSD pair to skyrocket higher.
The technical show that the 200-period MA on the four-hour time frame, around 1.3350, is the next major upside objective, prior to the GBPUSD pairs 200-day MA, close to the 1.3500 level.
UK CPI is estimated to jump to +5.9 percent year-on-year in February. Given the problems in Ukraine, next month’s CPI inflation could even move into double-digits, further prompting the BOE to raise rates again.
Later today, there will be key central bank speakers as well later on, so this could also affect both the British pound currency and the US dollar, so it might not be all one-way trading for sterling.
Looking at sentiment data and how traders feel about sterling, the ActivTrader Market Sentiment tool shows that traders are currently slightly bullish towards sterling.
With 57% of traders turning bullish, it should be noted that this current sentiment reading is down from last week by nearly 15%, as traders take a more pessimistic view, despite the recovery.
GBPUSD Short-term Technical Analysis
Looking at the four-hour time frame, technical analysis clearly shows that that GBPUSD pair is making impressive new higher highs, after rebounding sharply from the 1.3000 price area.
A break above the 1.3200 level has cause an inverted head and shoulders pattern ignited, hence we could see a coming attack towards the 1.3350 to 1.3400 resistance level.
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GBPUSD Medium-term Technical Analysis
According to the weekly time frame, the GBPUSD pair could start to advance towards its 200-day moving average, which is a key technical metric that defines the medium-term trend.
The Williams Alligator indicator is currently issuing a buy signal on the daily time frame. This is a powerful sign that the GBPUSD pair could really be about to rally higher.
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