GBP/USD pulls back on the hottest inflation in 30 years and AUD/USD hits 75 cents

Britain’s inflation growth intensified last month, with the newest data showing that it had reached 6.2% in February – the highest reading in three decades. The elevated cost pressure has spread through to the fuel and energy sector and a wide range of goods from food to toys and games.

The latest surge in CPI had brought the inflation level to the highest bar since March 1992, when it stood at 7.1%. Further increases are anticipated as the recent data is yet to reflect the skyrocketing commodity prices triggered by Russia’s invasion of Ukraine.

GBP/USD technical analysis

The pair has been pulled back to its 20-days moving average, which is expected to provide a decent support for now. The other support that caught my eye is the ascending trend line that has been valid for the past two weeks. Both supports are pointing to the level around $1.3163.

However, if this support level is breached, the current bull-bias momentum for the pair could be at the risk of an overturn. In that case, the current trend line would pivot to the pressure level and send the GBP/USD to near $1.3098.

AUD/USD

The AUD/USD has briefly hit 75 cents first time in five months. The strength of the Australian dollar was primarily powered by the surging iron ore price, which has advanced more than 18% this month.

The rise of commodity prices this week has been fuelled by the mounting supply pressures as Russia’s attacks on Ukraine shows no sign of abating while concern deepens over the impact on the global economy. Both factors have reduced the risk appetite for investors who are struggling to identify havens for their money, as such, a sharp rotation to risky equities since last week is seemly losing its momentum.

AUD/USD technical analysis

The long buyer for the AUD/USD has pushed the pair to pass the September high of 0.7462, which can be viewed as the current support. The October high at 0.7558 is likely to be the next milestone for the commodity as it fights for a five-month high level.
The overall momentum is more bull-bias as the pair just breached the ceiling of the moving tunnel, which often would unfold a new chapter for rising.

However, it is worth noticing the RSI indicator which is entering the overbought territory, suggesting a slowdown of growth or short-term pullback could be on the cards.

Follow Hebe Chen on Twitter @BifeiChen

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