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GBP/USD below 50-DMA
At 9.30am (London time) we will see the latest UK inflation figures with the release of the consumer price index and the retail price index. Having seen the CPI come in at 1% last month, Bank of England governor Mark Carney will have already prepped his letter to the chancellor George Osborne. The expectations are for a figure of 0.7% figure, and as it is more than 1% away from the targeted 2% it will require a letter of explanation.
With both ASDA and Tesco announcing renewed price cuts and the collapse of oil, this will come as no real surprise to market watchers.
As GBP/USD sits below $1.52 it still remains below the 50-day moving average by some 400 pips, and the divergence from the 200-DMA is now 1,150 pips. The relative strength index confirms that GBP/USD is still oversold but there have been precious few triggers to warrant a change in sentiment. It is unlikely today’s UK inflation figures will change that trend.