Inflation, double top: UK CPI came in at 2.2% on the year for October. The GBP fell on this reading, and cable fell below 1.5885 which completed a double top. In the near-term the market is resolving some oversold conditions in the 1H chart and perhaps the 4H chart. If the pullback gets to 1.60, a bearish market is likely going to provide resistance. Otherwise, if GBP/USD can rally back above 1.60, the double top will not look as legit. Also the 4H RSI should hold below 60 if the bearish momentum is to extend.
Downside: If the market does extend the bearish breakout, the first target could be just above the 1.57 area, 38.2% retracement, psychological level, and around a previous resistance pivot. A second target could be based on the width of the double top, which would be projected toward the 1.5530 level, around 50% retracement as seen in the daily chart.
Downside: If the market does extend the bearish breakout, the first target could be just above the 1.57 area, 38.2% retracement, psychological level, and around a previous resistance pivot. A second target could be based on the width of the double top, which would be projected toward the 1.5530 level, around 50% retracement as seen in the daily chart.
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