The Great Britain Pound (GBP) heads up against the US Dollar (USD) this morning resulting in a figure of more than 1.2800. The price increases because of the recent economic release concerning producer price index core output. Since the price printed a lower low during the last downside move, therefore it is anticipated that the technical bias might remain bearish.
Technical Analysis: GBP/USD
Presently, the pair is being traded around 1.2850, with an immediate trend line resistance standing around 1.2888. Moving a little further on the upside, another resistance may be noted around 1.2900, the psychological number ahead of a key horizontal resistance level which may stick the price to stay below 1.3010 as shown in the graph given below.
On the other hand, key horizontal support can be noted around 1.2761, ahead of a Fibonacci level which stands next around 1.2607, supporting the price to stay firm around the said level. Further, the trend line support may also prevent the price from decreasing below 1.2418 as shown in the graph above. The technical bias shall remain bearish as long as 1.2933, the trend line remains in place.
GBP PPI Core Output Release
From a fundamental point of view, the figure concerning producers’ price index core output remained 1.3% in the UK during October. Comparing to the figure reported the previous month i-e 1.7%, it remained lower down beating the consensus of the market leaders.
The producers’ price index is put forward by the National Statistics of the UK, which takes accounts of non-volatile items to remain unbiased. It doesn’t include volatile items such as food and energy whose variation can trigger an inflationary outlook on the country’s economy. Generally speaking, a high reading is regarded as a bullish market for the GBPUSD whereas a lower output suggests a bearish market for the pair.
Considering the price patter of the pair over the last couple of days, a bullish move isn’t expected. Therefore, those who wish to open large positions may avoid trading GBPUSD in the short to medium term. Should you wish to stay safe in any case you need to seek different trading strategies offered by our recommended brokers such as hedging and negative balance protection.