GBPUSD Movement
For the 24 hours to 23:00 GMT, GBP rose 0.28% against the USD and closed at 1.6249, as the headline reading for UK inflation topped market forecasts for April.
The Bank of England (BoE) Governor, Mervyn King, in his letter to the Chancellor indicated that inflation in the UK may rise further in the next few months. He further added that the continuing volatility in energy and commodity prices makes it difficult to be sure when inflation would return to the target.
In the UK, the consumer price inflation, on an annual basis, increased 4.5% in April, the biggest increase since September 2008, following a 4.0% rise recorded in March. The Retail Prices Index, on an annual basis, rose by 5.2% in April, compared to a 5.3% rise recorded in the previous month. Additionally, the Department for Communities and Local Government reported that house prices rose, on an annual basis, rose by 0.9% in March, the biggest increase since December 2010, following a revised 0.5% increase recorded in the previous month.
The pair opened the Asian session at 1.6249, and is trading at 1.6268 at 3.00GMT. The pair is trading 0.12% higher from the New York session close.
The pair has its first short term resistance at 1.6324, followed by the next resistance at 1.6381. The first support is at 1.6191, with the subsequent support at 1.6115.
With a series of UK economic releases today, including Bank of England minutes and ILO unemployment rate, trading in the pair is expected to be influenced by the resulting cues from these releases.
The currency pair is showing convergence with its 20 Hr and 50 Hr moving averages.
