GBPUSD Movement
For the 24 hours to 23:00 GMT, the GBP fell 0.12% against the USD and closed at 1.6960, hurt by a lacklustre UK consumer inflation data. On the other hand, the greenback advanced as data showed that consumer prices in the US posted its largest month-on-month increase since February 2013 in May.
On the economic front, data revealed that UK consumer inflation rate decline more than market expectations to a 54-month low level of 1.5% in May, the sixth consecutive month in which the inflation came in below the BoE’s 2.0% inflation target. Separately, UK retail price index rose 2.4%, below economists’ projections for May but the ONS house price index rose 9.9% in the year to April 2014, taking the index up to an all-time-high of 197.5.
Meanwhile, during his interview with a newspaper, BoE’s David Miles, highlighted his expectations for the UK economy to witness an interest rate hike before May 2015 while reinforcing expectations for the central bank to still tighten its policy stance this year.
In the Asian session, at GMT0300, the pair is trading at 1.6965, with the GBP trading slightly higher from yesterday’s close.
The pair is expected to find support at 1.6939, and a fall through could take it to the next support level of 1.6912. The pair is expected to find its first resistance at 1.6991, and a rise through could take it to the next resistance level of 1.7016.
Traders keenly await the release of the BoE minutes, which would provide an insight into the voting pattern of the central bank’s policymakers on the monetary policy.
The currency pair is showing convergence with its 20 Hr and 50 Hr moving averages.
