GBP/USD: Technical Signals Point to Bearish Momentum Amidst...
GBP/USD: Technical Signals Point to Bearish Momentum Amidst Inflation Data
The GBP/USD currency pair, after a robust performance on Tuesday, encountered a reversal on Wednesday, shedding over 50 pips during the early European session. The pair's current technical outlook indicates the potential development of bearish momentum.
As of now, the pair is undergoing a retest of the support area, specifically around the crucial 50% and 61.8% Fibonacci levels. Despite this retracement, our bias remains bullish, suggesting the possibility of a new successful long setup. The target for this bullish scenario is set at 1.27930, with further potential extension towards 1.28500.
Examining the economic landscape, the recent UK inflation data adds a layer of complexity to the currency pair's dynamics. The Consumer Price Index (CPI) in the UK showed a decline to 3.9% on a yearly basis in November, down from the October figure of 4.6%. This reading fell short of market expectations, which were positioned at 4.4%. Additionally, the Core CPI, excluding volatile energy and food prices, witnessed a decrease to 5.1% from October's 5.7%, also below analysts' predictions of 5.6%.
These inflation figures introduce a nuanced backdrop for GBP/USD, contributing to the ongoing market sentiment. Traders and investors will be closely monitoring the pair's movements, weighing technical signals against fundamental factors, as they navigate the evolving landscape of this currency pair.
Our preference
Long positions above 1.2500 with targets at 1.27930 & 1.28500 in extension.
The GBP/USD currency pair, after a robust performance on Tuesday, encountered a reversal on Wednesday, shedding over 50 pips during the early European session. The pair's current technical outlook indicates the potential development of bearish momentum.
As of now, the pair is undergoing a retest of the support area, specifically around the crucial 50% and 61.8% Fibonacci levels. Despite this retracement, our bias remains bullish, suggesting the possibility of a new successful long setup. The target for this bullish scenario is set at 1.27930, with further potential extension towards 1.28500.
Examining the economic landscape, the recent UK inflation data adds a layer of complexity to the currency pair's dynamics. The Consumer Price Index (CPI) in the UK showed a decline to 3.9% on a yearly basis in November, down from the October figure of 4.6%. This reading fell short of market expectations, which were positioned at 4.4%. Additionally, the Core CPI, excluding volatile energy and food prices, witnessed a decrease to 5.1% from October's 5.7%, also below analysts' predictions of 5.6%.
These inflation figures introduce a nuanced backdrop for GBP/USD, contributing to the ongoing market sentiment. Traders and investors will be closely monitoring the pair's movements, weighing technical signals against fundamental factors, as they navigate the evolving landscape of this currency pair.
Our preference
Long positions above 1.2500 with targets at 1.27930 & 1.28500 in extension.
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