Jakarta, GIC Trade – The pound was weighed down by the strengthening of the US dollar amid rising US bond yields and hawkish Fed officials' statements supporting the US dollar rebound.

The GBP/USD pair plunged to a new daily low below the 1.21000 level, due to disappointing UK inflation data. Where the UK consumer price index (CPI) fell to 10.1% YoY in January compared to the market forecast for a reading of 10.3% and a reading of the previous period of 10.5%.
 
The report signaled a third monthly decline in headline inflation after rising to a 41-year high in October. Meanwhile, the core CPI, which excludes food and energy, fell to 5.8% compared to the forecast for a reading of 6.2% from a reading of 6.3% in the previous period.
 
Given the largely gloomy UK inflation figures, supported by the previous day's mixed jobs report, the pound could fall further as Bank of England (BOE) officials recently highlighted the reliance on data for further rate hikes.
 
In addition, a separate Reuters survey of economists signaled no more than one rate hike of 25 basis points (bps) at the upcoming March policy meeting.
 
Other news, quoted from the Financial Times (FT) mentioned that British Prime Minister Rishi Sunak and Finance Minister Jeremy Hunt are ready for a deal with workers regarding wage increases. This talk is a breath of fresh air for the pound sterling currency to rebound.
 
Fundamentally, the UK inflation rate is quite worrying and also the hawkish attitude of Fed officials is looking at the pound sterling currency. Then how technically, see the following analysis:
 
Technical Analysis

 
GBP/USD on the 1-hour period moved down, trying to touch the support level at 1.20310. The decline is also confirmed by the chart being in the lower line region of the Bollinger Band (BB) indicator. Meanwhile, to turn the bias to bullish, the GBP/USD pair needs to pass the level of 1.21375 first.
 
If the MA25 line (the red one) can cross the MA100 line (the blue one), then the decline or bearish bias will be stronger.
 
Forex Today Analysis is a fundamental and technical view used by the author, not a suggestion or a solicitation. To get more information click on the image below.