GBP/USD dives down on disappointing CPI data

By FXstreet.com | Updated July 30, 2014 AAA

FXStreet (Moscow) - GBP/USD keeps its head down trading at 1.6980 right before the release of the UK CPI data, and reaching 1.6936 post the release.

When inflation is below target

The pound needed some kind of catalyst in order to go on with rising, or return to last week lows. Mark Carney gave just a hint, and now the market will scrutinize every piece of data in order to adjust its expectation on the rate hike. The inflation is one of the key arguments when talking about tightening, thus, when May CPI came out at 1.5 vs 1.7% expected, the market took it as another evidence of delay in rate hike expectations. The pound reacted to the news with a slide posting 1.6936 low on the release. The next target to the downside may be at 1.6904.

What are today’s key GBP/USD levels?

Today's central pivot point can be found at 1.6984, with support below at 1.6957, 1.6931, 1.6904 with resistance above at 1.7010, 1.7037, and 1.7063. Hourly Moving Averages are largely bullish, with the 200SMA at 1.6838, and the daily 20EMA bullish at 1.6835. Hourly RSI is bullish at 50.

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