GBP/USD has been quite bearish recently after bouncing off the resistance area of 1.3270-1.3330. GBP has been quite weak in nature recently due to the Brexit effect but PM May recently spoke about positive results in Brexit talks that did not quite help the currency to gain momentum. Today, a series of downbeat economic reports was published on the GBP side which made the currency lose ground against USD. Today, the UK CPI report was published with a slight increase as expected to 3.0% from the previous value of 2.9%, PPI Input report was published with worse value at 0.4% from the previous value of 2.3% which was expected to be at 1.2%, RPI report was published as unchanged at 3.9% which was expected to increase to 4.0%, Core CPI report was published unchanged as expected at 2.7%, HPI report was published worse than expected at 5.0% from the previous value of 4.5% which was expected to be at 5.4%, and PPI Output report was published as expected at 0.2% decreasing from the previous value of 0.4%. Along with these economic reports today, MPC Member Tenreyro and BOE Governor Carney spoke about the nation's key interest rate and future monetary policies. They expressed a dovish stance that led to further weakness in GBP against USD. On the USD side, today Import Prices report is going to be published which is expected to be unchanged at 0.6%, Capital Utilization Rate is expected to have a slight increase to 76.2% from the previous value of 76.1%, Industrial Production report is expected to show a positive change to 0.3% from the previous negative value of -0.9%, NAHB Housing Market Index is expected to be unchanged at 64. Besides, FOMC Member Harker is going to speak today about the upcoming interest rate decision and future monetary policies of the central bank. To sum up, despite having weak economic reports last week USD is currently dominating over GBP. GBP is expected to lose more ground in the coming days, thus leading to further bearish pressure in the pair until the UK comes up with positive macroeconomic reports to recover against the USD in the future.
Now let us look at the technical chart. The price is currently expected to proceed lower towards 1.2780 support area in the coming days. The price has rejected and retested off the 1.3300 resistance area recently along with dynamic level of 20 EMA resisting the price to proceed higher, which does indicate that the bearish pressure will continue further.
*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.
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