- UK’s inflation figures surprised to the downside.
- Cable broke below 1.3100 in the wake of data.
- Focus on Carney’s speech at ECB policy panel.
The Sterling is testing daily lows vs. the greenback on Tuesday, dragging GBP/USD to the vicinity of 1.3070 following the publication of October’s inflation figures.
GBP/USD offered on data
Cable met fresh sellers after UK’s inflation figures missed expectations in October. In fact, consumer prices rose at a monthly 0.1% (vs. 0.2% expected) and 3.0% over the last twelve months (vs. 3.1% forecasted).
In addition, prices stripping food and energy prices also followed suit, rising 0.1% inter-months (vs. 0.2% estimated) and 2.7% on a yearly basis (vs. 2.8% from prior surveys).
Spot dropped to the area of 1.3070, re-testing at the same time yesterday’s lows and the key 3-month support line off August’s low.
GBP should stay under pressure in light of Governor M.Carney’s speech at the ECB policy panel, with Chief Yellen, Kuroda and Draghi.
GBP/USD levels to consider
As of writing the pair is losing 0.18% at 1.3091 facing the immediate support at 1.3062 (low Nov.13) seconded by 1.3039 (low Nov.3) and finally 1.2878 (200-day sma). On the upside, a breakout of 1.3139 (10-day sma) would expose 1.3167 (21-day sma) and then 1.3222 (resistance line).
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