GBPUSD, M30 and H1
UK inflation data came in perkier than expected, with headline CPI rising to 3.1% y/y, its highest rate since March 2012. The median forecast had been for 3.0%, matching the rate seen in October and September. Core CPI, however, came in as expected, at 2.7%, the same as in October. PPI input data rose to a rate of 7.3% y/y, up from 4.6% in the month prior and above the median forecast for 6.7% y/y. PPI output data lifted to 3.0% y/y from 2.8%. Overall, the data paint a picture of slightly warmer than expected price rises, though still within BoE projections.
Sterling rallied by 30 pips in making an intra-day high at 1.3380 in the wake of the data release, though the data won’t shift the BoE’s MPC from a likely no-change decision at its meeting this week. However it immediately close lower in the 30-minutes breaking the support of 1.3326 and making an intra-day low at 1.3318. A closing of the hourly candle below 1.3318, which is also last 2 week’s low, suggests further weakness for the day, with next support at 1.3280. Inta-day resistance is at 1.3350. The RSI slip below 50, while Bollinger Bands pattern is extending its lines . The Daily chart is also weak with pair traded in the lower Bollinger Bands pattern so far today.
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