Since the beginning of this month, the bearish sentiment has been prevailing on the GBP/USD currency pair. The pound weakened against the US dollar by more than 2.5%. At the moment, participants in the financial markets took a wait-and-see attitude. On Tuesday, February 13, the National Statistical Office of Great Britain will publish the consumer price index (January). Experts expect that in January, consumer prices will fall by 0.6% (monthly), compared with an increase of 0.4% in December. In the year of calculation, the consumer price index will slow to 2.9% from 3.0%.
The inflation level in the UK has peaked in the past 6 years, that is much higher than the target level of the Bank of England. The regulator is concerned that consumer prices in the country are growing stronger than the level of wages. Such dynamics may lead to a decline in the standards of living in Britain. At the same time, at the last meeting, the head of the Central Bank, Mark Carney, said that the labor market is stable, and wages will grow at a steady pace.
This report can have a significant impact on the dynamics and alignment of forces on the GBP/USD currency pair. We recommend you to pay attention to the difference between the actual and forecasted values of the indicators.
- The resistance zone – 1.4400-1.4500
- The support zone – 1.3650-1.3750
- The option balance level – 1.4075
At the moment, the bearish sentiment is prevailing on the GBP/USD currency pair. We recommend opening positions in the direction of the current trend. We do not exclude that in the short term the GBP/USD quotes may test the monthly control zone of 1.3650-1.3750.
Alternative option. If the price fixes above the 1.3875 mark, we recommend you to look for entry points to the market to open long positions. The movement is tending potentially to the balance level of 1.4075.
This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.