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GBP/USD killed by the CPI numbers – back to 1.6650

FXStreet (Moscow) - GBP/USD came under pressure before the UK CPI release reaching 1.6690 area and filling the Monday’s gap; it moved to 1.6638 low post data.

When CPI is out

The pound slid to 1.6690 area right before the British report release, as traders started to worry the CPI is not strong enough to leave the pair above 1.67 level. And they were right. The Consumer Price Index came out at -0.3% m/m, +1.6% y/y vs -0.2% m/m, +1.8% y/y expected triggering the sell-off of the pair with initial move to 1.6638. The further direction of the pair may depend on the market sentiment before the BOE minutes release. The rumors about possible views divergence within the MPC camp may restore the demand for the pair with the possibility of recovery back to 1.67 area by Wednesday.

What are today’s key GBP/USD levels?

Current price is 1.6650, with resistance ahead at 1.6670 (Daily 200 SMA), 1.6686, 1.6688 and 1.6701.
Next support to the downside can be found at 1.6636 (Daily Low), 1.6615 (Weekly Classic S1), 1.6540 (Weekly Classic S2), 1.6424 (Weekly Classic S3) and 1.6306 (YTD Low).

UK: Annual CPI slows down to 1.6% in July

According to data released today by National Statistics, UK annual inflation rose 1.6% in July, following 1.9% growth registered the previous month. This result is below analysts' forecasts of +1.8%. On a monthly basis CPI fell 0.3%, after climbing 0.2%, below consensus of -0.2%.
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