GBP/USD (a 4-hour chart)
The pound strengthened slightly on Tuesday after falling sharply the previous day, despite the reduction in the inflation rate. The rate of annual inflation in the UK slowed down in December to 2%, compared with 2.1% the previous month for the first time since November 2009, having reached the targeted level of the England's Bank – 2%. Changes in the indicator in December are not expected. Core inflation excluding the prices on food and energy fell to 1.7% in December from 1.8% in November.
The northern movement is canceled after the pair broke the cloud downwards. The price is below the cloud and above the Chinkou Span.
The downward movement will be in a force as long the price is below the Kijun -sen. Kijun-sen and Tenkan-Sen are directed down. Tenkan-Sen is crossing Kijun-sen downwards.
Bollinger bands indicator is broadening.
The MACD histogram is in a negative zone, showing a decrease.
We believe the pair to continue the decrease to the 1.6220.