GBPUSD Movement
For the 24 hours to 23:00 GMT, GBP rose marginally higher against the USD and closed at 1.5331. The pound rose against the broadly weaker US dollar, as market sentiment was buoyed by stronger than expected Euro-zone and Chinese economic data, while a decline in UK inflation also supported sterling..
In the UK, Consumer Price Index (CPI) declined 4.2% (YoY) in December compared to a 4.8% (YoY) increase recorded in November. Additionally, the core CPI rose 3.0% (YoY) in December, following a 3.2% (YoY) increase in November. Also, the Retail Price Index retreated 4.8% (YoY) in December, compared to a 5.2% (YoY) increase in November. Meanwhile, the Department for Communities and Local Government (DCLG) indicated that the House Price Index edged down 0.3% (YoY) in November, marking the eighth consecutive drop and compared to a 0.4% (YoY) fall in October. Moreover, the Conference Board indicated that its Leading Economic Index (LEI) declined 0.6% to 102.5 in November, from a 0.3% drop in October.
Bank of England’s Governor, Mervyn King stated that the European Central Bank (ECB) has initiated sufficient measures to ease the crisis in the Euro-zone and providing additional liquidity would not solve the underlying problems. The Governor added that it was ultimately up to governments in the region to resolve the crisis.
In the Asian session, at GMT0400, the pair is trading at 1.5356, with the GBP trading 0.16% higher from yesterday’s close.
The pair is expected to find support at 1.5317, and a fall through could take it to the next support level of 1.5277. The pair is expected to find its first resistance at 1.5400, and a rise through could take it to the next resistance level of 1.5444.
Trading trends in the pair today are expected to be determined by the release of UK’s claimant count rate, ILO Unemployment Rate and jobless claims change.
The currency pair is showing convergence with its 20 Hr moving average and is trading just above its 50 Hr moving average.
