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Forex pairs in this Article » GBP/USD
FXStreet (Barcelona) - Valeria Bednarik, FXStreet Chief Analyst notes that Pound eased early Tuesday, with the GBP/USD shedding ground amid an early market rumor of UK YoY inflation being just of 1.8%.

Key Quotes

“With the news finally out and the reading actually below expected but at 1.9%, the pair decline extended, albeit with a more moderated move.”

“The decline in inflation is in fact good for the UK, always struggling to keep it subdue: PM David Cameron stated that the fall in inflation is just evidence that the long term economic plan is working. But for the market, it means a delay in rate hikes and that’s the main reason of current fall.”

“Technically, the pair trades below the 23.6% retracement of its latest bearish run currently around 1.6690 and offering immediate short term resistance, while indicators head south right above their midlines, gaining strong downward momentum.”

“Also this last candle opened below its 20 SMA, adding to the bearish case. Having been as low as 1.6653, static support area, the pair needs to break below it to confirm another downward movement towards 1.6610 price zone, 38.2% retracement of the same rally. On the other hand, a recovery above the mentioned 1.6390 area, should favor a retest of the static resistance level around 1.6745.”
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