GBP/USD is on a bullish consolidation pattern ahead of UK inflation data. Investors’ focus is on April’s retail sales; two days after the National of National statistics released consumer price data. The agency noted that inflation more than doubled amid the country’s recovery from the economic impacts of coronavirus lockdowns.
CPI was at 1.5% YoY compared to the predicted 1.4% and 0.7% in March. With the exclusion of food and energy, the core CPI matched analysts’ estimates of 1.3% YoY compared to the prior 1.1%. As for the retail sales, analysts expect a reading of 36.8% YoY. The figure is significantly higher than the prior month’s 7.2%. On a month-on-month basis, the forecasted 4.5% is a decline from 5.4% in March.
On the one hand, the rise in prices is expected and reflects the return to normalcy. However, the Bank of England (BoE) has indicated that it is monitoring the situation and would not allow to persistently move above its 2% target.
GBPUSD Technical Outlook
GBP/USD is on a bullish consolidation pattern. At the time of writing, it was down by 0.1% at 1.4176. On a four-hour chart, it is trading above the 25 and 50-day exponential moving averages. I expect the currency pair to move higher as the bulls target the three-month high hit on Tuesday at 1.4220. However, in the near term, it may experience some resistance at the psychological 1.4200.
On the lower side, it is likely to find support at 1.4150 or lower at 1.4100. Below that level, this thesis will be invalid.