• GBP/USD rose on Wednesday after the U.S. Treasury Department announced it plans to double liquidity support buyback operations for longer-dated bonds.
• The U.S. Treasury’s decision to double liquidity support for longer-dated bond buybacks drove U.S. yields lower and helped stabilize European bond markets, though the effect was weaker in the U.S.
• On the UK data front, British inflation rose to 2.9% in July from a 15-month low of 2.6% in June, according to the Office for National Statistics, though the rise was in line with economists' forecasts in a Reuters poll.
• The data, released a day after weak labour market figures, reinforced expectations that the Bank of England will leave interest rates unchanged in September.
• Immediate resistance is located at 1.3632(Higher BB), any close above will push the pair towards 1.3676(23.6%fib).
• Immediate support is seen at 1.3530 (38.2%fib) and break below could take the pair towards 1.3480(Aug 14th low).
Recommendation: Good to buy around 1.3580, with stop loss of 1.3500 and target price of 1.3650
