The Great Britain Pound (GBP) extended downside movement against the US Dollar (USD) on Wednesday, dragging the price of GBPUSD to less than 1.4170 following the Britain’s consumer price index data which is considered a key gauge for inflation. The technical bias remains bearish because of a Lower High in the recent upside rally.
As of this writing, the pair is being traded near 1.4163. A support may be noted near 1.4052, the swing high of the last downside wave ahead of 1.4000, the psychological number and then 1.3946, the swing high of the last major downside move as demonstrated in the following daily chart.
On the upside, the pair is likely to face a hurdle near 1.4397, the intraday high of yesterday ahead of 1.4503, the swing high of the last major upside rally and then 1.4668, the high of 2016. The technical bias will remain bearish as long as the 1.4503 resistance area is intact.
UK inflation as measured by the Consumer Prices Index was unchanged at 0.3% in February, according to the Office for National Statistics (ONS). Food prices saw the biggest rise, particularly vegetables, but transport costs fell, the ONS said. Annual inflation has been below the Bank of England’s 2% target for two years, and last year it was zero. The Bank said last month that it expected inflation to stay below 1% this year.
Considering the overall technical and fundamental outlook, selling the pair on short term rallies appears to be a good strategy.