GBP/USD: Daily Technical Analysis For August 20, 2014

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The Great Britain Slipped against the U.S dollar on Wednesday and dropped to a four-and-a-half month lows after the release of disappointing U.K. inflation data overshadowed recent comments by Bank of England Governor Mark Carney. The U.K. Office for National Statistics said the rate of consumer price inflation slowed to 1.6% last month from 1.9% in June and compared to expectations for a reading of 1.8%. Month-over-month, consumer price inflation declined 0.3% in July, compared to estimates for a 0.2% decline. Core CPI, which excludes food, energy, alcohol, and tobacco costs rose by 1.8% last month, down from 2% in June. Analysts had expected core prices to rise 1.9% in July. The data also showed that the house prices index climbed 10.2% in June, compared to forecasts for a reading of 11.5% and following a 10.5% increase in May.



Technically, intraday bias remains on the downside as 21 and 55 EMA’s crosses southwards with Stochastic, SSRC, MACD and RSI oscillators showing more bearish momentum. More decline to 1.65380(weekly S2) is expected, however a slight retracement might occur as RSI shows the market is over-sold. Investors are looking ahead to Wednesday’s minutes of the BoE’s August policy meeting for signs that the bank is moving closer to hiking borrowing costs.



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