GBP/USD up a little over 0.2% to 1.3837 on the day
The push higher comes after the hotter-than-expected UK inflation report earlier here
, which is cornering the BOE
into tightening policy sooner rather than later.
In response, money markets have now priced in two rate hikes by the BOE in 2022 with short sterling futures pricing in the highest rate expectations for a BOE move in the year ahead since March 2020.
If anything else, it indicates that the market may start to price in and look for more of a hawkish tilt by the central bank going into next week’s policy meeting.
As for the pound, cable is currently finding itself trading up to test its key hourly moving averages again, now contesting the 100-hour moving average (red line).
Push above that and the near-term bias turns more bullish with buyers able to build on a bounce off 1.3800 to take a run at the highs yesterday again.
The 1.3900 level stalled the upside move on the daily but it also comes as price ran into the 100-day moving average, currently seen at 1.3909.
As such, that will once again be the key resistance region to watch in the sessions ahead as the pound starts to look more spirited after the inflation report earlier.