GBP/USD Forecast: UK inflation data could challenge bulls´ determination

Valeria Bednarik FXStreet

GBP/USD Current price: 1.3911

The British Pound has managed to resist the dollar’s demand once again.
The January UK annual CPI is foreseen at 0.5% from 0.6% previously.
GBP/USD retains its bullish potential, finding buyers on intraday dips.

The GBP/USD pair peaked at 1.3951, its highest since April 2018, retreating from the level during US trading hours, but holding on to modest intraday gains above the 1.3900 level. As it has been happening lately, the pair depended on how speculative interest perceived the greenback, with the pound being quite resilient to dollar’s demand.

The UK will publish January inflation data this Wednesday. The annual CPI is foreseen at 0.5% from 0.6% previously while the core annual inflation is expected at 1.3%. Producer Prices in the same month are expected to have contracted from their previous readings.

GBP/USD short-term technical outlook

The GBP/USD pair has bounced from a daily low of 1.3868 and trades around 1.3910 ahead of the Asian opening. The near-term picture keeps supporting a bullish continuation towards the 1.4000 threshold. In the 4-hour chart, the pair met buyers around a firmly bullish 20 SMA, which advances beyond the larger ones. Technical indicators hold near overbought readings, but lost directional strength, still far from suggesting bullish exhaustion.

Support levels: 1.3890 1.3840 1.3790

Resistance levels: 1.3955 1.4000 1.4040

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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