The GBPUSD is slightly up and is trading around the 1.3016 mark (as at the time of writing) after upbeat UK CPI data today. The UK CPI data (monthly) came in at 1.8%, which was better than the 1.6% that the markets were expecting. It was also better than the previous figure of 1.3%, which stayed unrevised.
The upbeat CPI data means that then Bank of England may not have a reason to lower rates at its next MPC meeting. This is a situation which the markets seem to be enjoying, as the British Pound is making a strong move against the US Dollar, having traded at an intraday low of 1.2974 before the news release.
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Technical Outlook for GBPUSD
The uptick in price following the higher-than-expected consumer inflation figure is bringing the GBPUSD into contention with the broken triangle’s lower border on the daily chart. This border is expected to provide the initial resistance to the pullback move, somewhere around the 1.3025 price level.
If price can break this level to the upside, the GBPUSD will move back into the triangle and have an opportunity to continue the consolidation within the triangle’s borders. This move could bring the GBPUSD into contact with the 1.31754 resistance, formed by the upper boundary of the triangle. 1.33193 and 1.34171 are the other upside targets that could become relevant if the GBPUSD continues a bullish recovery that takes it out of the triangle’s upper border.
On the flip side, rejection at the triangle’s lower border could give sellers more impetus to brush off the CPI-induced rally, which opens the door for the pair to test downside targets at 1.29932 and 1.29042.
With more data scheduled for release on Thursday and Friday, we can expect to see more action on this pair.