The British pound trades with weak downward dynamics during the morning session, testing the level of 1.2190 for a breakdown. The GBP/USD pair is correcting uncertainly after a noticeable growth the day before, as a result of which the instrument managed to renew local highs from December 15.
The reason for the emergence of positive dynamics was the decline of the dollar in almost the entire spectrum of the market in response to the publication of December data on inflation in the US. As expected, consumer price growth fell to its lowest level since November 2021, at 6.5%. Analysts expect that new evidence of lower inflationary risks will help the US Federal Reserve keep moving towards easing monetary policy. The most optimistic experts also do not rule out a possible reduction in the interest rate towards the end of the year, but so far there are no prerequisites for this.
The November data on the dynamics of Gross Domestic Product (GDP) and Industrial Production is expected to be released in the UK today. Forecasts suggest that the national economy lost 0.2% after growing 0.5% in the previous month. In turn, Industrial Production may show a sharp drop of 3.0% YoY and 0.3% MoM after -2.4% a month earlier.
Bollinger Bands in D1 chart demonstrate flat dynamics. The price range expands from above, freeing a path to new local highs for the "bulls". MACD is growing preserving a weak buy signal (located above the signal line). Stochastic, retreating from its highs, shows a moderate decrease, signaling in favor of the development of corrective downward dynamics in the near future.
Resistance levels: 1.2240, 1.2311, 1.2400, 1.2500. | Support levels: 1.2150, 1.2084, 1.2000, 1.1900.