GBP/USD: pressured, but not bearish unless below 1.2830

Valeria Bednarik FXStreet

GBP/USD Current price: 1.2890

The GBP/USD surged to its highest for this week, printing 1.2957 after the release of higher-than-expected inflation figures in the UK, but quickly retraced sub-1.2900, amid pressure coming from the EUR/GBP cross on EUR's rally, and decreasing buying interest around the British currency, ahead of the upcoming elections. Inflation in the UK rose in April beyond expected, printing a whopping 2.7% yearly basis, above the 2.6% expected and previous 2.3%. When compared to the previous month, inflation advanced 0.5%, surpassing the 0.4% forecast. Producer prices inflation was also higher than expected, with factory output prices up by 0.5% in the same month, and by 3.6% yearly basis, matching previous month's figures, but above the 3.4% expected. The pair, however, held below the 1.2900 level, in spite of soft US housing figures, signaling fading interest in the UK currency. The short term picture is neutral, as in the 4 hours chart, technical indicators remain stuck around their mid-lines as the price hovers around a modestly bearish 20 SMA. The key support is 1.2830, with a break below it favoring a decline towards the 1.2765 region, the base of its latest range. Spikes beyond 1.2900 are now seen as selling opportunities, although the pair can regain its bullish tone on a recovery beyond 1.2960.

Support levels: 1.2830 1.2800 1.2765

Resistance levels: 1.2920 1.2960 1.2995

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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