GBP/USD Symmetrical Triangle, EUR/GBP Channel Resistance in Play
- GBPUSD stuck in triangle on H4 timeframe.
- EURGBP rejected at August 2013 channel resistance.
- See the 'high' importance events on the DailyFX Economic Calendar.
Today's UK CPI figures were nothing exciting and certainly fit within the Bank of England's expectations per the Quarterly Inflation Report, but that hasn't precluded the British Pound from posting modest gains against its major counterparts.
In the QIR last week, the BoE indicated that it believed inflation would continue to run lower into at least Q1'15, which we can attribute in part to exchange rate headwinds (the GBP peaked in July, and it takes six- to nine-months for rates to cycle through the real economy).
Today's data does little to change the fact that incoming British economic data has been rather poor. The Citi Economic Surprise Index, a gauge of economic data momentum, is at -37.1, just off the yearly low set on November 7 at -43.7.
The good news for the BoE is that inflation has stopped falling - and that in and of itself may open up a small window for the British Pound to recoup some of its losses predicated around economic negativity. The setups in GBP-crosses all call for continuation, though depending on which pair you look at, that may bear a different definition.
See the above video for technical considerations in GBPUSD, EURGBP, and GBPJPY.
--- Written by Christopher Vecchio, Currency Strategist
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