- British Pound traded down today against the US Dollar and broke a major support area.
- There was a support trend line formed on the hourly chart of the GBPUSD pair, which was broken to clear the way for more losses.
- The UK Consumer Price Index released by the National Statistics posted a rise of 0.2% in Feb 2016, whereas the forecast was 0.4%.
- In terms of the yearly change, the UK CPI rose 0.3%, as forecasted.
The British Pound after setting a top around the 1.4500 level against the US Dollar moved down. There was a support trend line formed on the hourly chart of the GBPUSD pair, which was breached by the sellers to open the doors for more losses.
The worst part is the fact that the pair is now below the 100 and 200 hourly simple moving average. So, there are chances of a move towards the 76.4% Fib retracement level of the last leg from the 1.4056 low to 1.4511 high.
If the pair attempts to correct higher, then the broken trend line and 200 SMA may act as a resistance.
Today, the UK saw a major release in the form of the Consumer Price Index by the National Statistics. The forecast was slated for a rise of 0.4% in the CPI in Feb 2016. However, the outcome was lower, as the CPI rose 0.2% in Feb 2016, compared with the previous month.
The main points added by the report are, “the Consumer Prices Index (CPI) rose by 0.3% in the year to February 2016, unchanged from January 2016. This maintains the position seen over the last few months of a rate which is a little above zero. The contributions to change in the CPI rate from the detailed categories were relatively small compared with most months“.
Overall, the GBPUSD may trade down moving ahead, and selling rallies might be considered.