Sterling retreats after testing resistance at 1.3550 for the second time in four weeks, despite supportive technical indicators.
The British Pound retreated from a high near 1.3550, failing to break above its mid-July peak and closing with a slight loss. The move marks the second rejection at this level in four weeks, despite bullish momentum signals below the surface.
Technical indicators remain supportive, with the 50-day and 200-day EMAs converged above 1.3400 and the faster line on top. Sterling has held above both averages for ten sessions, while the daily Stochastic RSI sits at 63 and rising, suggesting room for further gains.
July’s CPI data matched forecasts exactly, with headline inflation at 3.4% YoY and core at 2.5%, offering no catalyst for a reversal. Futures markets trimmed odds of a September rate hike to the low 40s, down from near 50% a day earlier.