GBP/USD analysis: BOE offers not hope, will inflation?

Valeria Bednarik FXStreet

GBP/USD Current price: 1.3427

BOE dovish and data-dependent, economic growth now a major concern.
UK yearly core inflation expected to have ticked lower to 2.2% in April from 2.3%.

The GBP/USD pair attempted to regain the upside and traded as high as 1.3491, but was unable to hold on to gains and retreated toward the1.3430/40 price zone. BOE's members testified before a parliamentary special committee on inflation, offering quite a dovish stance. Carney remarked that rates will remain low as long as the UK economy doesn't pick up, dashing hopes for an August hike. UK April inflation will take the spotlight this Wednesday, as the kingdom will release CPI, PPI, and Retail Price Index figures. Core yearly CPI is foreseen at 2.2% from previous 2.3% retreating further from the peaks set above 3.0% and closer to BOE's comfort level. With inflation back to "normal" is now economic growth what's holding back the UK Central Bank. Technically, the 4 hours chart shows that a bearish 20 SMA keeps containing advances, now at around 1.3450, while technical indicators remain within bearish territory, the RSI lacking directional strength at 42 and the Momentum advancing modestly, all of which maintains the risk leaned to the downside.

Support levels: 1.3390 1.3355 1.3320

Resistance levels: 1.3450 1.3490 1.3520

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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