Yesterday we saw notably weak inflation and much softer than expected, with UK consumer price index data falling to -0.3% (MoM) and 1.0% (YoY) with core also falling to 1.2% (YoY). This emphasizes the lack of inflationary pressures in the UK and takes pressure off of the BoE to hike rates.
Today on the economic agenda we will have from the UK the ILO unemployment rate (3M) in November that is expected to fall from 6.0% to 5.8% showing strength in the labor market. From the other side of the Atlantic in the US we will have the consumer price index (YoY) in November that is estimated to fall from 1.7% to 1.4% and de FED interest rate decision with the monetary policy statement.
GBPUSD rose on yesterday session closing near the high of the day with a wide range. The pair is trading above the 10-day moving average and the stochastic is showing bullish momentum.
Expecting upward move to 1.5916 on a break above previous day high at 1.5785 (scenario 1) or a break below the 1.5701 level could push the pair to Year low at 1.5551 (scenario 2).