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Bear trend remains in GBP/USD
GBP/USD's rate continues to bump its head against the $1.5000 level that was previously support and is now acting as resistance. The longer-term bear trend in GBP/USD is not under threat, but it will be interesting to see if the sellers come in before the moving averages move closer to the $1.5200 level or at this psychological one.
The last couple of days saw UK inflation collapse down to 0%, and the period of deflation predicted by market observers almost looks inevitable. The fly in the ointment of this theory has been Saudi Arabia’s military intervention in Yemen, as it has felt the need to help the struggling ruling party. This has had the unavoidable effect of squeezing both Brent and US light oil prices higher by over 4%. A sustained period of higher oil prices would help keep inflation here or even see it rise.
The Bank of England has said nothing that would indicate that it is about to intervene; however, with the UK general election starting in earnest there is always the possibility of politicians muddying the waters. The bear trend remains intact and higher levels continue to offer more attractive levels to sell at.