Key Points
- The British Pound faced a lot of selling pressure and moved below 1.2800 against the US Dollar.
- There are two bearish trend lines with resistance at 1.2720 and 1.2750 on the hourly chart of GBPUSD.
- Today, the UK Consumer Price Index for May 2017 was released by the National Statistics.
- The outcome was better than the forecast, as there was an increase of 0.3% in May 2017 (MoM).
GBPUSD Technical Analysis
The British Pound declined sharply against the US Dollar, and traded as low as 1.2640. Later, the GBPUSD pair started a consolidation, and currently trading above the 1.2680 level.
At the moment, the pair is attempting a break above the 1.2700 handle and the 21 hourly simple moving average. Above 1.2700, the 23.6% Fib retracement level of the last decline from the 1.2981 high to 1.2640 may act as a resistance.
Furthermore, there are two bearish trend lines with resistance at 1.2720 and 1.2750 on the hourly chart, waiting to prevent upsides in the near term. Only a close above 1.2770 might push the pair back in the bullish zone.
UK Consumer Price Index
Recently in the UK, the Consumer Price Index for May 2017 was released by the National Statistics. The market was positioned for a rise of 0.2% in the CPI, compared with the previous month.
The result was better than the forecast, as there was an increase of 0.3% in May 2017. In terms of the yearly change, there was an increase of 2.9% in the CPI versus the forecast of 2.7%. The report added that the “upward contributions were partially offset by falls in motor fuel prices, and air and sea fares, the latter two influenced by the timing of Easter in April this year”.
Overall, the GBPUSD pair may attempt an upside break above 1.2750, but may fail in the short term.
