The GBP/USD pair jumped higher ahead of the release of inflation data in the UK, reaching a daily high of 1.4515. The news however, came out mixed as during January, the CPI rose by 0.3%, compared to a year before, but fell by 0.8% compared to December 2015. The producer price index, also continued to fall at the beginning of the year, as output prices for goods produced by UK manufacturers fell 1.0% in the year to January 2016, compared with a fall of 1.4% in the year to December 2015, while input prices declined by 7.6% in the same period.
The pair retreated from the mentioned high, and erased most of its pre-news gains, as oil prices shed their latest gains following news that Saudi Arabia, Russia and Venezuela agreed to freeze output at January levels. The measure is kind of disappointing, as freezing production is not enough to solve the worldwide glut.
Anyway, and from a technical point of view, the 4 hours chart shows that the upside is quite limited, as the intraday rally stalled at the 200 EMA, while the price is now back below a bearish 20 SMA, and the technical indicators head south below their mid-lines. The daily low stands at 1.4404, and a break below it should lead to a steeper decline down to the 1.4350 region, while further decline below this last expose the 1.4300 level.
Advances towards the 1.4520/30 region should be seen as selling opportunities, with only a clear advance beyond 1.4565 supporting a more sustainable advance in the pair.
View the live chart of the GBP/USD
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