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The Consumer Price Index (CPI) report for the UK was released today, showing that inflation is decreasing at a faster rate than analysts had predicted. According to data from ForexFactory:
→ Yearly CPI: actual = 1.7%, forecast = 1.9%, previous = 2.2%;
→ Yearly Core CPI: actual = 3.2%, forecast = 3.4%, previous = 3.6%.
The currency market responded with a decline in the pound sterling against other currencies. Traders likely assume that the Bank of England now has stronger reasons to consider easing its current monetary policy, aimed at curbing inflation.
Specifically, the GBP/USD rate fell to its lowest in nearly two months.
Technical analysis of the GBP/USD chart shows that:
→ The price dropped below the psychological level of 1.3000;
→ It fell beneath the lower boundary of the ascending channel (shown in blue), which had been relevant since May 2024. Resistance could be expected after breaking this line.
Bearish momentum may extend into the US trading session. It is possible that the GBP/USD rate could drop further to 1.2900, where the lower boundary of a developing descending channel is becoming clearer on the GBP/USD chart today.
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