GBPUSD - More Declines Likely or Can it Recover?

Posted By FxNewInfo.com Posted On 19 January 2016
  • British Pound continued to struggle to recover even 50 pips against the US Dollar.
  • GBPUSD traded lower and tested the 1.4235-40 support area where buyers defended the downside.
  • There is a major release in the UK today, as the Consumer Price Index will be published by the National Statistics.
  • The forecast is slated for a rise of 0.1% in December 2015, compared with the preceding month reading of 0%.

GBPUSD Technical Analysis

The downside move in the GBPUSD pair was unstoppable, as the pair traded below the 1.4250 level and created a new low of 1.4236. Buyers are fighting hard to prevent any further declines, but it unlikely that they would succeed.

GBPUSD

There is a lot of bearish pressure on the GBPUSD pair, which may continue in the short term. There are a couple of bearish trend lines formed on the hourly chart, which may act as a barrier and a sell area. Sellers might remain in action as long as the pair is below the trend lines.

The hourly RSI is below the 50 level, suggesting how strong the selling pressure is on the GBPUSD pair. A break below 1.4236 may open the way for a test of 1.4200.

UK CPI

Today, there is a monster release in the UK that may impact the GBPUSD pair in the short term. The UK Consumer Price Index, which is a measure of price movements by the comparison between the retail prices of a representative shopping basket of goods and services will be released by the National Statistics. The forecast is slated for a rise of 0.1% in December 2015, compared with the preceding month reading of 0%. If there is a disappointing reading for the UK CPI, then the GBPUSD pair may come under a lot of bearish pressure.

Chinese GDP

Today, the Chinese Gross Domestic Product (GDP), which studies the gross value of all goods and services produced by China was released by the National Bureau of Statistics of China. The forecast was slated for a rise of 1.7% in the fourth quarter of 2015, compared with the preceding quarter. However, the outcome was disappointing, as the Chinese GDP posted an increase of 1.6%.

Overall, there is no bullish sentiment at present for GBPUSD and it may continue trading down.

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