GBP/USD Forecast: News 1 – Pound 0


The first bunch of fundamental data from the UK is out, and is no good for Pound: before the data was even released, speculation of a weaker CPI put GBP/USD under selling pressure, down to 1.6170 from previous 1.6220. Inflation finally came out, down to 1.5% as expected, albeit PPI readings were generally weak, pushing the pair to a fresh low of 1.6160, now consolidating nearby. Such weak number diminishes chances of a sooner rate hike in the UK and investors run to price it in.

Technically, the pair breached the 23.6% retracement of its latest bearish run at 1.6190, now immediate resistance as latest recoveries found sellers around it according to the 1 hour chart. In the 4 hours one, indicators had gained bearish momentum, accelerating south below their midlines, supporting some further slides: a downward acceleration below 1.6160 should see the pair extending towards the 1.6110/20 price zone, while if this last gives up, this month low around 1.6050 comes next.

A recovery above 1.6190 on the other hand should take out some of the pressure and see the pair back to its comfort zone between 1.6220 and 1.6250.

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