GBPUSD: PROBABLY DUE FOR A DEEPER CORRECTION
We have seen a strong rebound in U.K economic activities in the second half of 2012, however expansion lost some momentum in November and December, economy continued to expand but at a slower pace, especially in the industrial and services sectors, latest figure came below market consensus and previous months.
Meanwhile, the latest inflation data lifted pressure on the GBPUSD, as it came below market expectations as well. The consumer price index declined towards the central bank target at 2.00 percent for the first time since 2009, which would ease pressure on the central bank, and to maintain interest rates near zero for a longer time, and until further sustainable improvement in the U.K economy.
Accordingly, I am looking for further correctional downside pressure on the GBPUSD, supported by the decline in inflation figures in the U.K. and probably a sustained economic recovery in the U.S.
Technically, a break below the rising trend line and 50-days SMA and most importantly 1.6250 may confirm this bias. Targets start at 1.6070 then 1.5890.
Meanwhile, the latest inflation data lifted pressure on the GBPUSD, as it came below market expectations as well. The consumer price index declined towards the central bank target at 2.00 percent for the first time since 2009, which would ease pressure on the central bank, and to maintain interest rates near zero for a longer time, and until further sustainable improvement in the U.K economy.
Accordingly, I am looking for further correctional downside pressure on the GBPUSD, supported by the decline in inflation figures in the U.K. and probably a sustained economic recovery in the U.S.
Technically, a break below the rising trend line and 50-days SMA and most importantly 1.6250 may confirm this bias. Targets start at 1.6070 then 1.5890.