GBP/USD breaks resistance

Source: Dukascopy Bank SA


Due to an unclear reason, the release of the US Core PCE Price Inflation has caused a surge of the Pound against the US Dollar. The US inflation came in higher than expected, which in theory should have strengthened the US Dollar and cause a GBP/USD decline. Meanwhile, the GBP/USD is the only US Dollar pair, where the peer currency has surged against the Greenback.

From a technical analysis perspective, the pair has broken the resistance zone at 1.2500/1.2515. The follow up surge eventually encountered resistance at 1.2580, before retracing to look for support. At mid-day on Monday, the 1.2500/1.2515 range, the 50-hour simple moving average and the weekly simple pivot point at 1.2510 were providing support.

A resumption of the GBP surge against the US Dollar would face resistance at 1.2580, 1.2600 and the weekly R1 simple pivot point at 1.2634.

However, a decline below 1.2500 is most likely going to look for support in the 100 and 200-hour simple moving averages near 1.2480 and 1.2460. Further below, take into account the weekly S1 simple pivot point at 1.2437.
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