GBPUSD – Testing key inflection point for downside to resume
GBP jumped to daily high of 1.5280s after BoE’s Broadbent commented that the November yield curve pushed the CPI forecast over 2% in 2016. Annual rate of CPI continued to remain at a record low of -0.1% and in its longest run at below zero. Meanwhile, m/m CPI rose above zero by 0.1%. The accompanying producer price report also showed a lack of price pressures in the pipeline, with the output PPI flat on the month and down -1.3% y/y. With inflationary pressures still low in the UK, there is little pressure on the BoE to tighten monetary policy any time soon.
While 1.5230 supports intraday downside reactions expect grind higher to test offers above 1.53 ahead of broader downside trend resistance at 1.5350
- Monitoring intraday reversal patterns on initial test of 1.5350, will venture short on a rejection here leaning against 1.54 to initially target a retest of 1.52 and 1.50 in extension.
- Current price action on daily chart is suggest an AB=CD corrective pattern into trend resistance. Intraday price patterns suggest cable is developing a rising wedge pattern into the resistance level highlighted in the chart indicative of a momentum loss.
- Trading Update – Stops to 1.5230
- Trading Update – Stops to 1.5180
- Trading Update – Stops to 1.5130
- Trading Update – Stops to 1.5030