GBP/USD Forecast: UK inflation adds pressure on the pound
Premium|Take advantage of 60% OFF on your first month.
Grab this special offer, it's 7 months for FREE deal! And access ALL our articles and analysis.
You have reached your limit of 5 free articles for this month.
BLACK FRIDAY SALE! 60% OFF!
Grab this special offer, it's 7 months for FREE deal! And access ALL our articles and analysis.
CLAIM OFFERGBP/USD Current price: 1.3694
- UK inflation unexpectedly shrank in February to 0.4% YoY.
- Business activity in the UK improved in March, according to Markit.
- GBP/USD struggles to hold above the 1.3700 level on dollar’s strength.
The GBP/USD pair bottomed this Wednesday at 1.3673 but managed to trim part of its intraday losses and finished the day just below the 1.3700 level. Another batch of discouraging UK data weighed on Pound, as the country published February inflation figures. The Consumer Price Index printed at 0.4% YoY, while the core reading came in at 0.9% below the 1.4% expected. The Retail Price Index resulted in 1.4% YoY vs the 1.6% expected. However, Markit PMIs were better than anticipated. The manufacturing index improved to 57.9, while the services one advanced to 56.8 in March, according to preliminary estimates.
This Thursday, Bank of England Governor Andrew Bailey is due to participate in a virtual panel discussion about central bank innovation at an online event hosted by the Bank for International Settlements.
GBP/USD short-term technical outlook
The 4-hour chart for GBP/USD shows that the 20 SMA has fallen sharply below the longer ones, but above the current price, maintaining the risk skewed to the downside. The Momentum indicator holds within negative levels. The RSI indicator recovered some ground but remains within oversold levels, without signs of bearish exhaustion.
Support levels: 1.3675 1.3640 1.3595
Resistance levels: 1.3730 1.3780 1.3825
GBP/USD Current price: 1.3694
- UK inflation unexpectedly shrank in February to 0.4% YoY.
- Business activity in the UK improved in March, according to Markit.
- GBP/USD struggles to hold above the 1.3700 level on dollar’s strength.
The GBP/USD pair bottomed this Wednesday at 1.3673 but managed to trim part of its intraday losses and finished the day just below the 1.3700 level. Another batch of discouraging UK data weighed on Pound, as the country published February inflation figures. The Consumer Price Index printed at 0.4% YoY, while the core reading came in at 0.9% below the 1.4% expected. The Retail Price Index resulted in 1.4% YoY vs the 1.6% expected. However, Markit PMIs were better than anticipated. The manufacturing index improved to 57.9, while the services one advanced to 56.8 in March, according to preliminary estimates.
This Thursday, Bank of England Governor Andrew Bailey is due to participate in a virtual panel discussion about central bank innovation at an online event hosted by the Bank for International Settlements.
GBP/USD short-term technical outlook
The 4-hour chart for GBP/USD shows that the 20 SMA has fallen sharply below the longer ones, but above the current price, maintaining the risk skewed to the downside. The Momentum indicator holds within negative levels. The RSI indicator recovered some ground but remains within oversold levels, without signs of bearish exhaustion.
Support levels: 1.3675 1.3640 1.3595
Resistance levels: 1.3730 1.3780 1.3825
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.