The Great Britain Pound (GBP) inched lower against the US Dollar (USD) on Tuesday, dragging the price of GBPUSD to less than 1.2500 following some key economic news. The technical bias has turned bullish after the emergence of bullish pin bar a few days ago.
Technical Analysis
As of this writing, the pair is being traded near 1.2473. A support can be noted around 1.2400 (the trendline support area as well as psychological number) ahead of 1.2346 (low of the bullish pin bar emerged on Tuesday) and then 1.1986 (the low of 2017).
On the upside, a hurdle may be noted around 1.2675 (the trendline resistance area) ahead of 1.2700-1.2706 (the high of last major upside move & psychological number) and then 1.2774 (the high of December 6th, 2016) as demonstrated in the given above daily chart. The technical bias shall remain bullish as long as the 1.2346 support area is intact.
UK Manufacturing Production
UK consumer prices fell 0.5% in January with the year-on-year rate increasing to 1.8% from 1.6% the previous month given that prices had fallen more sharply in January 2016. The annual increase was below consensus forecasts for a steeper increase to 1.9%, although this was still the highest annual rate since June 2014. The core inflation rate was unchanged at 1.6% compared with expectations of an increase to 1.7% while the Retail Prices Index (RPI) rate increased to 2.6% from 2.5% compared with consensus forecasts of a sharper increase to 2.8%.
Trade Idea
Considering the overall technical and fundamental outlook, selling the pair around current levels appears to be a good strategy in short to medium term.