Earlier today, UK September CPI came in at +1.7% year-over-year, below the expected +1.9%, with core CPI at +3.2% versus the forecasted +3.4%. The numbers marked a decline from prior figures of +2.2% and +3.6%, respectively.
The softer inflation data led to a drop in GBP/USD from 1.3073 to 1.2981, as it reinforced expectations of a potential rate cut by the Bank of England in November. However, the price did rotated back to the upside and back above the natural support at 1.3000. Back on September 11th, the price bottomed at 1.3001 just above that level.
The corrective high off the balance today reached up to 1.30306, but has since rotated back to the downside and currently trades just below the 1.3000 level at 1.29967.
Sellers are making a play. Stay below 1.3000 would give the sellers confidence to push down toward its 100-day moving average currently at 1.2953 (blue line on the chart above). The last time the price traded below its 100-day moving average was back on August 8
This article was written by Greg Michalowski at www.forexlive.com.
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