The GBP/USD has decreased today on the mixed United Kingdom data, has dropped also because the USDX continues to support the greenback’s bullish movement. The dollar stay higher as the US dollar index has edged higher today, has climbed as much as 101.40, much above the 101.13 yesterday’s high, a further increase will help the greenback to increase further versus its rivals.
The GBP/USD continues the extended sideways movement, personally I’m still waiting for a breakout from the range between the 1.2089 – 1.2798 levels, we’ll have a clear direction only when the rate will escape from this narrow movement. Right now is trading in the red and could drop further in the coming days, after the failure to make new highs.
The UK’s data have come in mixed today and has failed to lift the Cable, the CPI rose by 1.8% in January, less versus the 1.9% estimate, while the Core CPI surged by 1.6%, has failed to meet the 1.7% forecast, has remained steady at 1.6% for the second month in January. The RPI indicator has increased only by 2.6% in January, but less than the 2.8% prediction. The PPI Input, HPI and the PPI Output indicators have come in better than expected, but Cable wasn’t impressed.
The rate has decreased today and now is trading right below the 50% Fibonacci line (short ascending dotted line), could decrease further if will close below this dynamic support, could still approach the 50% Fibonacci line (descending dotted line) if the USDX will resume the rebound. Could be attracted also by the lower median line (lml) of the ascending pitchfork, we have an important confluence area formed at the intersection between the 50% Fibonacci line with the lower median line (lml), most likely will be attracted by this level, where he may find support again.
Remains to see what will happen in the coming months, but right now the rate is expected to resume the sideways movement between the 1.2798 and the 1.2089 level, the behavior has changed on the short term when the price has started to make higher lows, but remains under pressure as long as is trading below the median line (ML) of the major descending pitchfork.