Technical Bias: Bullish
- British Pound rocketed higher against the US dollar after the UK CPI release.
- UK Consumer Price Index released by the National Statistics registered an increase of 0.1% in July 2015, compared to the same month a year ago whereas the market was expecting no change.
- In terms of the monthly change, the UK CPI decreased by 0.2% in July 2015.
- GBPUSD climbed higher and trading near a major resistance confluence area of 1.5700.
The GBPUSD pair surged higher after the positive UK CPI release, as buyers gained control. The pair climbed by more than 60 pips, and now trading near a critical resistance area. The last swing high of 1.5700 acted as a barrier for buyers on many occasions, and it might continue to do so.
We need to see if there is a break above the highlighted resistance area or not moving ahead, as it would be very crucial move in the near term.
The GBPUSD pair is well above the 100 and 200 simple moving average (H4), which is a positive sign.
Earlier during the London session, the UK Consumer Price Index, which measures the price movements by the comparison between the retail prices of a representative shopping basket of goods and services was published by the National Statistics. The forecast was of no change in the CPI in July 2015, compared to the same month a year ago. However, the outcome was better than the forecast, as the UK CPI increased by 0.1%.
In terms of the monthly change, the UK CPI decreased by 0.2% in July 2015, compared to the preceding month. This was also on the higher side compared with the forecast of a 0.3% decline. Overall, the data was positive for the GBPUSD pair, and helped buyers to gain traction.
We can attempt a buy trade if the GBPUSD breaks and settles above the highlighted resistance confluence area.