GBP/USD analysis: Pound bulls nowhere to find

GBP/USD Current price: 1.3887

  • UK inflation remained steady at 3.0% in January, prompting speculation of a May hike.
  • GBP/USD eases despite dollar's weakness after hitting a fresh weekly high.

The GBP/USD pair surged to its highest for the week mid-London morning, hitting 1.3923 following the release of UK inflation figures. Annual inflation remained steady at 3% in January against an expected fall to 2.9%, fueling speculation of an upcoming rate hike next May, particularly after BOE's statement last week. The Retail Price index eased in the same month, but remained high, at 4.0% from a previous 4.1%, while factory goods price inflation slowed amid food prices falling in January. Persistent dollar's weakness kept the pair around 1.3900 during the US session, but the fact that the Cable settled below the figure indicates that there are not much Pound bulls around. The UK won't offer any relevant news this Wednesday. Technically, the 4 hours chart shows that the price settled a few pips above its 20 SMA and 200 EMA, while indicators lost upward strength after entering positive territory, heading into the Asian opening with a neutral stance. An extension above the daily high could lead to an approach to the 1.4000 figure, although sustainable gains above the level are required to see a more constructive upward bias.

Support levels: 1.3840 1.3800 1.3770

Resistance levels: 1.3920 1.3950 1.3990

View Live Chart for the GBP/USD

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these securities. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Forex involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.