The Pound Sterling (GBP) discovered buying interest after the United Kingdom ONS reported that inflation in September remained higher than expectations. The GBP/USD pair could come out of the woods as the stalled inflation report would elevate risks of further policy-tightening by the Bank of England (BoE) in the November monetary policy meeting.
A sticky Consumer Price Index (CPI) would cast doubts on whether UK Prime Minister Rishi Sunak would stick to his promise of halving inflation to 5.5% by the year-end. The consequences of high inflationary pressures are expected to dampen the UK’s housing sector further, which has been struggling for a firm footing due to elevated borrowing costs. Pound Sterling rebounds to near 1.2200 after the release of the sticky inflation report but remains inside the trading range of 1.2120-1.2270. The broader GBP/USD outlook remains weak as it faced selling pressure while attempting to shift above the 20-day Exponential Moving Average (EMA), which trades around 1.2240. The major trend is bearish as the Cable is trading below the 50 and 200-day Exponential Moving Averages (EMAs).
