Forex Alert: GBP/USD under Pressure ahead of UK CPI Data
iNVEZZ (Manchester): As reported by FXstreet, with UK inflation data to be released, the GBP/USD sell-off is approaching a base of a daily descendant channel around 1.5850. FXstreet quotes Valeria Bednarik, chief analyst, as identifying levels of resistance for the pair at 1.5910, 1.5950 and 1.6000.
**UK CPI to Set the Tone for the GBP/USD Pair**
The main factor to define the movements of the GBP/USD pair during the day will be the UK Consumer Price Index (CPI), expected to be released at 9:30 GMT. The index increased by 2.2 percent last month and markets are broadly expecting a similar reading in November.
As noted by David Song from DailyFX, the headline reading for UK inflation is expected to increase an annualised 2.4 percent in October. The rebound in consumer price growth in turn is likely to boost the pound. With the UK emerging from its double-dip recession, an increased number of Bank of England policy makers may drop their dovish stance on monetary policy, which is also likely to increase the pound appeal.
FXstreet however quotes Rabobank International as saying that the UK inflation data has become less of interest in recent months with inflation returning to the Bank of England’s 1-3 percent target range following a 27-month run.