The GBP/USD pair bounced sharply from a daily low of 1.5609, level reached after UK inflation fell to its lowest rate in more than a decade in November. Yearly basis, inflation declined to 1% from 1.35 in October, while the monthly number resulted in a whopping -0.3%. The slowdown in inflation is being attributed to falling oil prices that lost over 45% in this 2014, pushing down transport cost, alongside with a drop in food prices. PPI however, beat expectations rising 1.4% yearly basis.
Nevertheless, broad dollar weakness overlapped negative inflation readings, and the GBP/USD surged above the 1.5700 level where it stands. Technically, the 4 hours chart shows that price recovered above its 20 SMA that anyway maintains a mild bearish slope, while indicators recovered from negative levels, but stalled right around their midlines, showing limited upward strength. The 1.5750/70 area has proved strong in the past, and selling interest is expected to surge if reached. It will take a clear break above it to confirm further advances towards the 1.5820/40 price zone. A slide back below the 1.5690 level on the other hand, should see the pair easing towards 1.5640/50 price zone.
View Live Chart for GBP/USD
Nevertheless, broad dollar weakness overlapped negative inflation readings, and the GBP/USD surged above the 1.5700 level where it stands. Technically, the 4 hours chart shows that price recovered above its 20 SMA that anyway maintains a mild bearish slope, while indicators recovered from negative levels, but stalled right around their midlines, showing limited upward strength. The 1.5750/70 area has proved strong in the past, and selling interest is expected to surge if reached. It will take a clear break above it to confirm further advances towards the 1.5820/40 price zone. A slide back below the 1.5690 level on the other hand, should see the pair easing towards 1.5640/50 price zone.
View Live Chart for GBP/USD
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