GBP/USD analysis: about to challenge 1.3300

Valeria Bednarik FXStreet

GBP/USD Current price: 1.3311

UK inflation up to its highest in almost six years.
UK employment figures: wages matter more than ever.

The GBP/USD pair plunged to 1.3303 this Tuesday, and closed the day nearby, helped by a change in sentiment towards the greenback, demanded ahead of US Wednesday first-tier events, and UK November inflation figures. The CPI rose 3.1% YoY, the highest in almost six years, resulting in the pair initially spiking up to 1.3379, as usually higher inflation implicates a rate hike, but that doesn't seem to be the case this time. In fact, the Bank of England will have its monetary policy meeting this week, but Thursday's announcement is largely expected to be a non-event, amid persistent Brexit uncertainty. The Sterling may find some relief this Wednesday, as the kingdom is scheduled to release its latest employment figures. The sector has been performing well, despite the Brexit, with market's attention focused on wages' growth, as salaries have been lagging inflation. In the meantime, the technical picture is short-term bearish, with the price barely holding above quite a strong dynamic support, the 200 EMA in the 4 hours chart currently at 1.3310. The pair has remained below the 61.8% retracement of its latest bullish run at 1.3345 and below a bearish 20 SMA in the mentioned chart, while indicators hold within negative territory, but with the Momentum heading up and the RSI flat around 38, suggesting the pair may consolidate before the next directional move.

Support levels: 1.3300 1.3260 1.3220

Resistance levels: 1.3345 1.3380 1.3420

View Live Chart for the GBP/USD

Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

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