This is a technicals post trading straight off the chart and candlesticks pattern based on my inflation interpretation.
As I was saying before, UK’s annual inflation rate is nearing 3% now with the last figure released at 2.9% up from the month before at 2.6%. The central bank has an inflation target at 2% so for the months ahead I think we should see a more hawkish stance. This should ultimately drive the Great Britain Pound higher.
For the time being, this is a trade I entered as it appears this relative resistance level is held resisted.
As annotated, there was a bull move the third candle back, but it seems to have died off rather quickly. The current bearish candle is breaking lower from the doji candle before. If we establish the doji as a range on a lower time frame, it is possible to look at it as a range break-out lower.
Looking at the longer term timeframes, I don’t think this bearish move is over. The next major level to watch out for is at the 0.8927~ area as detailed below.
This level was a previous resistance level that became held supported. I consider this as a strong potential for price to drop to and then take a pause. From that level onwards, I do not have much of a directional bias and it will definitely have to be a pair to monitor there on out.