GBP/USD declines back to 1.2590/1.2610

Source: Dukascopy Bank SA


The 1.2750 level held and caused a decline of the Pound. Moreover, the decline was massively impacted by the lower than expected UK Consumer Price Index release. Namely, markets expected annual inflation to be down from 4.6% to 4.3%, but the actual number was 3.9%. The major decline of inflation signals that the central bankers of the United Kingdom could reduce interest rates earlier than previously expected.

The follow up decline eventually reached the major support zone at 1.2590/1.2610. The range held and a recovery to 1.2700 occurred during the first part of Thursday's trading.

A move above 1.2700 might be slowed down by the 1.2715/1.2730 range, before the 1.2750 level would be tested again. Higher above, the GBP/USD would face the resistance of the 1.2780/1.2795 range, the 1.2800 mark, the weekly R1 simple pivot point at 1.2812 and the August high level at 1.2819.

In the meantime, a decline could find some support in the 1.2650 level and the 200-hour simple moving average. Below these levels, take into account the mentioned 1.2590/1.2610 range and the 1.2550 level.

In addition, it appears that the 50 and 100-hour SMAs and the weekly simple pivot point at 1.2656 were not able to impact the rate.
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