GBP/USD prints fresh weekly highs above 1.1700

• UK growth positive in July, but below expectations.
• Attention turns to US inflation numbers.
• GBP/USD up for the second day in a row, tests the 20-day SMA.

The GBP/USD is rising on Monday and during the American session climbed to 1.1709, reaching the highest level since August 30. Cable remains near the top, holding onto daily gains and a bullish bias in the very near term.

The pound continues to recover from multi-year lows against the US dollar. It is testing the 20-day Simple Moving Average and a consolidation above could open the doors to a more sustainable recovery.

Weak dollar ahead of CPIs

The US dollar is falling across the board on Monday hit by an improvement in risk sentiment and steady US yields. The DXY is falling by 0.75%, hovering around 0108.15. The US 10-year yield stands at 3.28% and the 2*-year at 3.52%. The Dow Jones rises by 0.90% and the S&P 1%, adding to last week’s gains.

On Tuesday, August US CPI numbers are due. A 0.1% decline is expected on the monthly reading and a slide in the annual rate from 8.5% to 8.1%. The report will be relevant for Federal Reserve rate hike expectations ahead of the FOMC meeting next week. The Bank of England will also have its meeting next week (postponed due the Queen’s death).

In the UK, July growth data showed a recovery from the 0.6% June contraction with a 0.2% expansion. The figure was below expectations. On Tuesday labor data is due and the CPI on Wednesday.

Technical levels