For the GBP / USD pair, the day was also not easy. After the publication of data on inflation in the UK, the pound was under pressure and began to decline actively. Published data showed a decrease in inflationary pressure compared to the previous month (the inflation rate in annual terms fell from 3.1% to 3.0%), but still inflation remains well above the target level of 2.0% set by the Bank of England.
In the afternoon, the bulls managed to rectify the situation on the weakening of the dollar and as a result the pair completed the trading day at the opening of the day, and this morning was even able to update the maximum set on Monday.
Important for market participants is the situation associated with the release of the UK from the EU. The European side continues to adhere to a tough position, despite the willingness of some EU countries to maintain close ties with the United Kingdom and pro-Brexit advocates. The UK is still expected to agree to the preservation of immigration rules and current trade agreements during the transition period.
The technical picture of the GBP / USD pair is very similar to the situation that has developed on the EUR / USD chart. We see a false breakdown of the local maximum, which acts as a reversal signal, and is now supported, including by technical indicators. Therefore, until the moment when the price is below the level of 1.3820, the priority will be the scenario with price reduction with the first goal at the level of 1.3730. In the case of the breakdown of the level of 1.3730, one should expect a deeper pullback to the area of 1.3660.
Our recommendations: sell the pair with the price rising to the level of 1.3820. Review prepared by Fort Financial Services Research Department. Follow our publications!