The UK’s annual inflation rate published in the European session on Wednesday yesterday recorded a high reading of 5.4% beating expectations of an increase to 5.2%.
The figure records the UK's highest inflation rate in 30 years, since March 1992.
This gives investors expectations to see the Bank of England (BOE) continue to tighten its policy after interest rates were raised last December.
The Pound showed an increase in its value in Wednesday’s trading yesterday after a decline that occurred since the beginning of the week.
On the price chart the GBP/USD pair saw the price have taken a short break from making a decline with the rise happening again yesterday.
The price has risen to the level of around 1.36500 testing the SBR zone (support become resistance) which is the resistance for the current price increase.
Price movement above the Moving Average 50 (MA50) barrier level on the 1 -hour time frame gives an early signal for a bullish trend change.
However, analysts still think that the decline in prices will continue with the expectation of a strengthening US dollar ahead of the FOMC meeting next week.
If the decline continues again over the weekend, the level of 1.35700 is unlikely to be able to support the rise further.
A lower decline will test the price support zone that was previously the focus such as the 1.35000 level or lower at 1.34000.
On the other hand if a price increase occurs, the resistance at 1.36500 will be tested again before the continued rise will head towards the 1.37400 high zone reached last week.
