GBPUSD rallies above trendline resistance on weak US CPI; brighter outlook for the UK economy

Slobodan Drvenica Windsor Brokers

GBPUSD

Cable surged through trendline resistance (1.3930) after data showed US inflation slowed in February.
CPI rose 0.2% previous month, matching the forecast but falling well below previous month’s 0.5% rise, signaling that expected pickup in inflation will be likely gradual.
Inflation report came after Jobs data last Friday which cooled expectations for stronger pace of US rate hikes in 2018, with weak CPI numbers expected to add further negative sentiment. Sterling was also supported by positive remarks from UK FinMin Hammond in his half-yearly update on the economy and public finances, showing brighter outlook for the UK economy. Lift above trendline resistance (which also marks Fibo 61.8% of 1.4069/1.3711 bear-leg) is strong bullish signal for acceleration towards initial barrier at 1.40 (daily cloud top) with possible extension towards 1.4069 (26 Feb lower top).
Close above bear-trendline is needed to confirm scenario.

Res: 1.3985; 1.4000; 1.4069; 1.4100
Sup: 1.3930; 1.3914; 1.3874; 1.3850

Interested in GBPUSD technicals? Check out the key levels

1. R3 1.4013
2. R2 1.3966
3. R1 1.3936
PP 1.3888
1. S1 1.3858
2. S2 1.3811
3. S3 1.3781

Author

Slobodan Drvenica

Windsor Brokers

Industry veteran with over 22 years’ experience, Slobodan Drvenica joined Windsor Brokers in 1995 when he was an active trader for more than 10 years, managing the trading desk and own account departments.

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