The GBP/USD price has formed a head and shoulders pattern ahead of the UK retail sales and flash PMI data. The pair is trading at 1.3846, which is slightly below yesterday’s high of 1.3880.
GBP/USD news: The British pound yesterday reacted to the latest inflation numbers from the UK. According to the ONS, consumer prices rose by 0.7% in January after rising by 0.6% in December. Core inflation, which excludes the volatile food and energy products, increased by 1.4% in January.
Looking ahead, the sterling will react to the upcoming UK retail sales that will come out tomorrow at 07:00 GMT. Economists expect the overall retail sales dropped by 1.3% in January after rising by 2.9% in the previous month. They see the core sales rising by 2.2%, lower than the previous 6.6%.
The GBP/USD will also react to other important data from the US. Later today, the statistics agency will publish the latest initial jobless claims numbers. They will also publish the latest housing starts and building permits data a day after it released impressive retail sales numbers.
The GBP/USD seems to be forming a head and shoulders pattern. It is trading at 1.3846, which is slightly below the right shoulder. The price has also moved below the 15-day and 25-day moving averages. Therefore, there is a high probability that the price will break-out lower. If it does, the next level to watch in the next few weeks will be 1.3645, which is the same distance between the neckline and the head. On the flip side, a close above 1.3880 will invalidate the H&S pattern.