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Sterling slips again
The upward move in GBP/USD over the month of February was ground to a halt yesterday when the US core inflation figures came in ahead of analysts’ estimates – 0.2% vs 0.1% expected. Adding to the pound’s problems were the comments from Federal Reserve member James Bullard, who stated the US central bank should drop the word ‘patient’ from its statement.
We are not anticipating any economic announcements from the UK today which means the trading session will be driven by US data, and we are expecting US CPI and the University of Michigan consumer sentiment at 1.30pm and 3pm (London time) respectively. These reports will give us a better indication of the state of the US economy, and whether an interest rate rise in the middle of the year is on the horizon or not. GBP/USD will decline should expectations be met.
The 200-hour moving average of $1.5430 is acting as resistance, and if this level is held it will make $1.54 the initial target; a move through this level brings $1.5340 into sight. However, a move above the 200-hour MA will bring the upside resistance of $1.5460 into play, and beyond that traders will look to $1.55.