GBP/USD Analysis: Anticipates British inflation release

Recovery of the Pound after rapid fall on Monday was neutralized by a combination of the 55-, 100- and 200-hour SMAs. From the southern direction the same function was exercised by support zone near the 1.3112 mark. In other words, the cable moved horizontally, anticipating the release of the British inflation data. At the moment, the rating is moving to the bottom, but if the released data beats expectations, market reaction might be large enough to bypass the above moving averages and elevate the rate to the weekly PP at 1.3160. In the opposite scenario, the sell-off of Sterling might be so active, that the currency rate will pass through the monthly S1 at 1.3072 and stop only near the 0% retracement level at 1.3039 and then resume the plunge towards the bottom edge of large descending channel.