GBP/USD rises above 1.3050 to highest since September

Cable broke above May’s high and soared to 1.3082, the highest level since September. GBP/USD was trading higher and then receive a sharp impulse from a decline of the US dollar across the board. 

GBP/USD breaking key resistance

The 1.3030/50 area, that capped the upside during May and also in June, is finally being broken. A consolidating on top could add support for an extension of the rally of the pound. While if it reverses and drops below it would be a strong negative signal. 

So far, the price is holding firm on top, still under 1.3100, headed toward the highest close in nine months. Above 1.3100, the next resistance could be seen at 1.3125 (Sep 23 high). 

USD tumbles 

The greenback is suffering significant losses. The Dollar Index dropped to the lowest level of the year. The decline started after today’s data showed that US CPI remained unchanged in June, below market consensus of a 0.1% raise. Also, the retail sales report showed an unexpected decline. 

US: Consumer Price Index was unchanged in June on a seasonally adjusted basis

US: Retail and food services sales for June 2017 were $473.5 billion, a decrease of 0.2%

The data weakened market expectations of more than one rate hike from the Federal Reserve during the rest of the year, reducing monetary policy divergences, making the dollar less attractive. 

US Dollar in fresh YTD lows near 95.00 on poor CPI