- The British Pound started a nice upside move after trading as low as 1.2843 against the US Dollar.
- The GBPUSD pair traded higher and recently broke a bearish trend line at 1.2920 on the hourly chart.
- The UK’s Consumer Price Index for April 2017 released by the National Statistics posted an increase of 2.7% (YoY), more than the forecast of 2.6%.
GBPUSD Technical Analysis
The British Pound fell towards 1.2840 against the US Dollar before finding support and moving higher. Later, the GBPUSD pair gained pace and moved above the 1.2875 resistance.
The upside move was such that the pair broke a bearish trend line at 1.2920 on the hourly chart, opening the gates for more upsides.
Also, there was a clear break above the 50% Fib retracement level of the last decline from the 1.2986 high to 1.2843 low.
GBPUSD Hourly Chart
All these are positive signs, and may lift the market sentiment in favor buyers. The pair may soon head higher and test another bearish trend line at 1.2965.
At the moment, it is trading near the 76.4% Fib retracement level of the last decline from the 1.2986 high to 1.2843 low.
So, there can be a minor pullback in GBPUSD towards 1.2930 before the pair starts to trade higher once again towards 1.2965 or even 1.2980.
UK Consumer Price Index
Today in the UK, the Consumer Price Index for April 2017 was released by the National Statistics. The market was expecting the CPI to increase by 0.4% in April 2017, compared with the previous month.
The actual result was a lot better than the forecast, as the CPI posted a rise of 0.5%. In terms of the yearly change, there was an increase of 2.7%, more than the forecast of 2.6%. Looking at the UK’s Core Consumer Price Index, there was an increase of 2.4%, more than the forecast of 2.2%
The report mentioned that:
Air fares were the main contributors to the increase in the rate in April 2017, although this balanced out a downward effect of similar magnitude in March 2017 and is due to Easter falling later than last year. Rising prices for clothing, vehicle excise duty and electricity also contributed to the increase in the rate.
Overall, the GBPUSD pair may continue to gain pace and could retest the 1.2965 swing high in the near term.