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Forex: GBP/USD bounces from 1.5280 back to 1.5300 area

FXstreet.com (Barcelona) - Following the drop to 1.5274 low on the release of UK prices data, 1.5280 was able to hold the market as support and pulled the GBP/USD back to the 1.5300 handle, reaching as high as 1.5317.

While annualized headline UK CPI came in unchanged at 2.8% as expected in March, the monthly change was of 0.3% (instead of 0.4% consensus) and Core (YoY) data came in at 2.4% (consensus of 2.3%). In regard to UK PPI, input fell -0.1% (MoM), less than the -0.2% expected, (annualized drop from 2.1% to 0.4% - consensus of 0.8%). Output PPI stayed unchanged at 0.3% (MoM) and 2.0% (YoY), but Core output was lower at 0.1% MoM (consensus of 0.2%) and 1.3% YoY (consensus of 1.4%). UK retail prices disappointed at 0.4%, below the 0.5% expected, but YoY data rose from 3.2% to 3.3% in line with consensus.

The Consumer Price Index in the Eurozone came in line with expectations, at 1.2% (MoM) and 1.7% (YoY) in March, while Core data rose from 1.3% to 1.5%, beating 1.4% consensus. The ZEW survey showed a decline in EMU economic sentiment, from 33.4 to 23.9 in April. In Germany, economic sentiment disappointed the market, falling from 48.5 to 36.3, below the expected 42.0. Current situation wasn’t good either, dropping from 13.6 to 9.2, below 12.0 consensus.

“The bias here remains negative, for a slide through 1.5240, en route to 1.5180 reversal area”, wrote Deltastock.com analyst Stoyan Mihaylov, pointing to key resistance at 1.5342.

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