The
UK November CPI release today showed best figures the last five years, having
3.1% increase on yearly basis and the inflation exceed the expectations of 0.2%
and is p with 0.3%. Following the news the GBP/USD dropped to two weeks low at
1.3310, but the weakened greenback supported the bounce to the daily high at
1.3380. At this point the pair found strong resistance provided by the 50%
Fibonacci retracement of latest bullish upleg. As seen on the four hour time frame
the price retreated from this level and currently is hovering around 1.3320. On
the same chart the 20-day SMA is displaying bearish slope above the price
movement, while the 100-day and 200-day SMAs had eased their bullish stance.
Stochastic has recovered from its extreme negative territory and started to
turn north, but yet remains below 20. RSI is around 30 and has lost directional
strength.
Stronger impetus the pair will get on Thursday when BoE will announce its
monetary policy decision. Until then GBP/USD will remain range bounded.
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