Recently, GBP/USD has been trading in the impulsive manner with bullish gains that led the price towards 1.38 area. Today GBP is currently struggling to sustain gains due to mixed economic reports published, which undermines the bullish momentum against USD. Today, the UK CPI report was published with a slight decrease to 3.0% as expected from the previous value of 3.1%, PPI Input decreased to 0.1% from the previous value of 1.6% which was expected to be at 0.5%, RPI report showed an increase to 4.1% which was expected to be unchanged at 3.9%, Core CPI report showed a decrease to 2.5% from the previous value of 2.7% which was expected to be at 2.6%, HPI report showed value of 5.1% decreasing from the previous value of 5.4% but it was better than expectation of 4.2%, PPI Output report was unchanged at 0.4% from a decrease to 0.2% earlier, and CB Index report is yet to be published which previously was at -0.2%. On the USD side, the US is due to release several high impact economic reports including Building Permits report to be published on Thursday. But today, Empire State Manufacturing Index report is scheduled which is expected to increase to 18.5 from the previous figure of 18.0. As for the long-term scenario, GBP is expected to advance further, but at present some retracement and correction are expected in this market before the bulls hit back in the future.
Now let us look at the technical chart. The price is currently quite bearish in nature showing bearish momentum after an impulsive bullish breakout above 1.36 support area. The pair is likely to retrace back towards the support area before showing any bullish intervention to push the price much higher towards 1.40 resistance area in the coming days. If the price remains above 1.36, the bullish bias is expected to 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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