GBPUSD rises towards 1.1890 following US Retail Sales and UK’s hot CPI

• Retail Sales in the United States registered their largest gains in eight months, bolstering the US Dollar.
• UK’s inflation data and Bank of England speakers kept the GBP from falling.
• GBPUSD Price Analysis: Once it breaks 1.2029, it could test the 200-DMA; otherwise, it could drop to 1.1647.

The GBPUSD climbed following the release of mixed US economic data from the United States, while also a slew of Bank of England (BoE) Governors crossed newswires after a red-hot UK CPI report. At the time of writing, the GBPUSD is trading at 1.1888, registering gains of 0.16% after hitting a daily high of 1.1941.

US Retail Sales showed consumer spending increased

US stocks are trading in the red after a solid US Retail Sales report. The US Department of Commerce (DoC) reported that sales grew the most in eight months, with readings hitting 1.3% MoM vs. 1% estimated by analysts. Digging deep into the report, Retail Sales in the control group, used to calculate Gross Domestic Product (GDP), expanded by 0.7% MoM vs. 0.3% foreseen.

Even though inflation data in the United States showed signs that an era of elevated prices could end, consumer resilience proves otherwise. Instead, Federal Reserve officials could be forced to continue its aggressive tightening, although they expressed a desire to slow the pace of tightening conditions,

Further US data revealed during the day saw Industrial Production (IP) plunging from September’s 0.1% to -0.1% MoM, below estimates of a 0.2% increase.

Of late, two Federal Reserve (Fed) policymakers crossed wires. New York Fed President John Williams said that price stability is essential for the US economy to function well. Later, the San Francisco Fed President Mary Daly said the central bank wants to see the economy slow, so they can get inflation down. She added that “Pausing is not part of the discussion” and foresees the Federal Funds rate (FFR) to peak at around 4.75% - 5.25%.

UK inflation breaks above 11%, pressuring the BoE

On the UK front, the Consumer Price Index for October jumped 11.1% YoY, smashing estimates of 10.7%, reported the Office for National Statistics (ONS). Notably, the inflation report comes one day before Chancellor Jeremy Hunt unveils the Autumn Budget, which is expected to show a “fiscally responsible” government under the new Prime Minister (PM) Rishi Sunak.

Following the release of the UK inflation report, the Bank of England Governor Andrew Baily said that inflation is reflecting a series of supply shocks. However, he added that those shocks are beginning to fade and noted that the central bank would raise rates further. In the meantime, the BoE’s newest member Swati Dhingra said the UK could get into a much deeper recession if rates continue to rise.

After a busy economic docket, the GBPUSD continued its uptrend, though stalled at around 1.1900. the major bias is neutral-to-upwards, though if it reclaims the 200-day Exponential Moving Average (EMA) at 1.2237, that could pave the way for further gains.

GBPUSD Price Analysis: Technical outlook

From a technical perspective, the GBPUSD’s unable to recapture 1.2000 exposes the pair to selling pressure. Although the Relative Strength Index (RSI) shows buyers’ momentum stills, November’s 15 inverted hammer candlestick with a long upper shadow showed signs of some liquidations. However, a renewed push above the weekly high at 1.2029 could motivate buyers to engage on the GBPUSD’s way toward the 200-day EMA. On the flip side, GBPUSD key support levels are 1.1800, followed by the 100-day EMA at 1.1647.