GBP/USD falls from around 1.2260 levels to 1.2240 currently
With the BOE already not exactly ruling out negative rates, waning inflation pressures and the threat of deflation will only keep stoking the fires of the topic in the coming months.
The pound is easing slightly after the data – not by a whole lot – but if anything else, expect more data such as this to continue to give traders more of a suggestion that the BOE may eventually start to really look at negative rates if price pressures decelerate further.
And that will be yet another headwind for the pound to consider in the medium-term.
For cable, price is now looking to keep under its 200-hour MA (blue line) as sellers are making their stand since overnight trading.
Buyers attempted to seize near-term control but fell short at the 38.2 retracement level just under the 1.2300 handle yesterday. The battle then turned towards the 200-hour MA and sellers are now finding reason to keep the near-term bias more neutral.
The resistance points at the 200-hour MA @ 1.2260 and 1.2293-00 will be the key levels to watch for any potential upside break.