The GBP/USD pair advanced in the European morning, helped by improved market mood and positive UK data, showing an up-tick in inflation readings. According to the official release, the UK CPI rose by 0.2% in the year to December 2015, compared with a 0.1% rise in the year to November 2015, while house prices increased by 7.7% in the year to November 2015, up from 7.0% in the year to October 2015. A negative note come with the PPI, as the price of goods bought and sold by UK manufacturers, as estimated by the producer price index, continued to fall in the year to December 2015, weighed by the continued decline in oil prices.
The pair reached a daily high of 1.4339 but lacks the necessary momentum to confirm a more solid advance at the time being, as the 4 hours chart shows that the price is hovering around a bearish 20 SMA while the technical indicators are correcting higher, but remain below their mid-lines.
Former lows in the 1.4350 region come as the immediate resistance, with a break above it probably seeing the pair extending up to 1.4420. Above this last, the upward corrective movement can extend during the following sessions, with 1.4500 being the next probable bullish target.
Should the price retreat below 1.4290, the risk turns back south, with 1.4250 and 1.4220 being the next bearish targets for this Tuesday.
View the live chart of the GBP/USD
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