The GBP/USD pair advanced up to 1.5387 this Tuesday, favored by a continued dollar's weakness. But the pair met strong selling interest around the critical Fibonacci resistance, and gave up over 80 pips ahead of the release of local inflation figures.
The UK CPI fell 0.1% in the year to September, negative for the second time in nearly 55 years, while the producer price index in the same month, and compared to a year before, fell by 1.8%. In the meantime, house prices continued to rise, as the UK House Price Index for August surged by 5.2%.
The pair extended its decline further, down to 1.5250, a strong static support from where is currently bouncing some, after accumulating over 130 pips down in a bit more than an hour. The pair is holding near its lows, and the 4 hours chart shows that it has broken several intraday supports, now trading below its 20 SMA and 200 EMA, both in the 1.5340 region, and below the 38.2% retracement of its latest daily decline. In the same chart, the technical indicators head sharply lower below their mid-lines, in line with additional declines, particularly if the price extends below 1.5235, the 23.6% retracement of the same rally and the immediate support.
Seems hard the pair can recover now, with selling interest now probably waiting on spikes towards the 1.5300/10 price zone. It would take a clear break above this last, to revert the bearish daily tone.
View the live chart of the GBP/USD
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