GBP/USD analysis: bullish, but inflation data will define

GBP/USD Current price: 1.2390

The GBP/USD pair settled at its highest in two-weeks, a couple of pips shy of the 1.2400 figure, as the Pound got a nice boost from the latest BOE's meeting that took place last Thursday. The Central Bank left its economic policy unchanged, but among the MPC there was one dissenter, Christine Forbes, who voted for a rate hike. But what actually fueled the GBP was a sentence included in the statement that reads "some members noted that it would take relatively little further upside news on the prospects of activity or inflation for them to consider that a more immediate reduction in policy support might be warranted." The UK will release multiple inflation figures this Wednesday, including PPI, CPI and Retail Price index, and if the figures beat market's expectations, will likely fuel Pound's rally, as a rate hike in the UK will become more imminent. From a technical point of view, the daily chart shows that technical indicators have entered positive territory, maintaining their bullish slopes and at their highest since late February, whilst the price is well above a now flat 20 SMA, around 1.2290, all of which supports additional gains for the upcoming days. In the 4 hours chart,  technical indicators have lost upward strength but hold within overbought territory, whilst the 20 SMA present a sharp bullish slope, also standing in the 1.2290 region. In this last time frame, the price has settled above its 200 EMA for the first time this March, adding to the bullish case. The immediate resistance is now 1.2425, the 38.2% retracement of the January rally, while a critical support comes at 1.2345, the 50% retracement of the same rally and February's low.

Support levels: 1.2345 1.2300 1.2260

Resistance levels: 1.2425 1.2470 1.2510

View Live Chart for the GBP/USD

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