GBPUSD – Can British Pound Hold Uptrend Ahead of UK CPI?
Aayush Jindal
Key Highlights
The British pound somehow managed to stay supported near the 1.2440 level against the US Dollar.
There is a critical bullish trend line on the 4-hours of GBPUSD at 1.2460, which is holding the downside move.
Today, the UK Consumer Price Index will be released for Jan 2017 by the National Statistics, which is forecasted to increase by 1.9% (YoY).
In terms of the monthly change, the UK Consumer Price Index is forecasted to decline by 0.5% in Jan 2017.
GBPUSD Technical Analysis
The British Pound after a sharp decline towards 1.2346 against the US Dollar found support. The GBPUSD pair is currently recovering, and eyes the UK CPI report for the next move.When we look at the 4-hours chart of GBPUSD, there is a critical bullish trend line with support at 1.2460. On the upside, the pair is facing sellers near the 61.8% Fib retracement level of the last downside move from the 1.2706 high to 1.2346 low.A break above the 1.2570-80 resistance may open the gates for a move towards the last swing high as 1.2700. On the downside, we need to keep a close watch on the 1.2460-80 support.
UK Consumer Price Index
Today, the UK will witness a couple of crucial economic releases like the CPI and PPI figures for Jan 2017. The UK Consumer Price Index will be released by the National Statistics. The market is expecting the retail prices of a representative shopping basket of goods and services to increase by 1.9% in Jan 2017, compared with the same month a year ago. It is more than the last rise of 1.6%.However, the monthly change in the UK CPI is forecasted to decline by 0.5% in Jan 2017, compared with the previous month. It will be on the lower side when compared with the last increase of 0.5%.The UK Producer Price Index (Input) is forecasted to increase by 18% in Jan 2017, compared with the same month a year ago. Overall, it looks like the market is expecting an increase in the CPI and PPI.If the result is around the market forecast, the British Pound may head towards 1.2620 against the US Dollar. Otherwise, there is a chance of a trend line break at 1.2460.
When we look at the 4-hours chart of GBPUSD, there is a critical bullish trend line with support at 1.2460. On the upside, the pair is facing sellers near the 61.8% Fib retracement level of the last downside move from the 1.2706 high to 1.2346 low.A break above the 1.2570-80 resistance may open the gates for a move towards the last swing high as 1.2700. On the downside, we need to keep a close watch on the 1.2460-80 support.