GBP/USD bursts out of consolidation, eyes on key daily resistance.

GBP/USD pops on U-turn budget speculation with daily resistance eyed. 

GBP/USD has rallied in recent trade ahead of the US inflation data at the top of the hour. At the time of writing, GBP/USD is trading at 1.1250 and popped 1.1299 amid more positive UK political noise. There are reports that there could be a UK budget U-turn with Tuss advocating raising corporation tax. Sky News reported that talks are underway over whether to reverse parts of the mini-budget although chancellor Kwasi Kwarteng has been reiterating his tax-cutting agenda.

Meanwhile, the Bank of England confirmed on Wednesday it’s emergency bond-buying scheme will end on Friday as expected. However, the Financial Times reported that the central bank has signalled privately to bankers that it could extend its emergency bond-buying programme, raising some confusion among investors. Either way, volatility is back in the binds and the long-dated UK gilt prices have rallied sharply, pushing yields down by as much as 42 basis points to 4.476%, easing back from 20-year highs struck on Wednesday.

Looking ahead, the US Consumer Price Index will be the driver for the immediate future, the main data release of the week. ”We expect the headline to print relatively low at 0.2% MoM in line with consensus, as gasoline prices continued to decline during September,” analysts at Danske Bank said. ”For core, we continue to see modest upside risks to the consensus expectation, and forecast a rise of 0.5% MoM (consensus 0.4% MoM).”

GBP/USD technical analysis

September’s high of 1.1736 is on the radar for the bulls on a break of the daily resistance. However, a strong inflation report from the US could see the greenback surge, and that means the recent supports and daily, and weekly lows will be eyed with a focus on 1.1050 first and then 1.0920s.

EUR/USD plunges below 0.9700 on hot US inflation data

EUR/USD came under heavy bearish pressure and slumped below 0.9700 with the initial reaction to the US inflation data. The Core Consumer Price Index (CPI), which excludes volatile food and energy prices, climbed to 6.6% on a yearly basis in September from 6.3%.

EUR/USD News 

GBP/USD rises above 1.1200 on UK political headlines

GBP/USD has advanced to a fresh weekly high above 1.1200 on Thursday on reports claiming that the UK government could announce changes to the mini budget later in the day. Investors await the September Consumer Price Index data from the US.

GBP/USD News 

Gold climbs above $1,680 as US yields decline

Gold has gained traction after having dropped below $1,670 earlier in the day and advanced above $1,680. The benchmark 10-year US Treasury bond yield is down more than 1% ahead of the US CPI data, allowing XAU/USD to preserve its bullish momentum.

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