Chart of the day - GBPUSD (13.09.2022)

Release of the US CPI report for August is a key event of the day and is expected to trigger a jump in USD volatility. Data will be released at 1:30 pm BST and the market expects headline gauge to drop from 8.5 to 8.1% YoY. However, core measure is expected to tick higher from 5.9 to 6.1% YoY. While the release won't have much of an impact on the FOMC decision next week, it may provide some guidance on whether the Fed still needs to tighten policy as quickly as it does now.

GBP traders will get a chance to trade volatility tomorrow at 7:00 am BST when the UK CPI report is set to be released. In this case the market expects headline price growth to accelerate from 10.1 to 10.2% YoY and core price growth to move from 6.2 to 6.3% YoY.

Taking a look at GBPUSD chart at H4 interval we can see that the pair has recently jumped above the upper limit of a local market geometry, hinting at a possible trend reversal. A major obstacle ahead is the 1.1750 resistance zone, marked with 38.2% retracement of the latest downward impulse. A break above would boost a bullish bias in the market and may pave the way for a test of the 50% retracement in the 1.1850 area.

Source: xStation5