GBP/USD (a 4-hour chart)
The strong UK Producer Price Index failed to support the pound which softened after a decline UK October's inflation figures.
The pound remained under pressure and continued its slide on Tuesday. GBP/USD traded within a tight range during the Asian hours and moved lower ahead of the European opening. The price accelerated its decline and was able to test the 1.2400 level in the mid-European session. The pair broke the 200-EMA and tested the 100-EMA during the European hours. The moving averages were neutral in the 4 hours chart. The current resistance is seen at 1.2500, the support is at 1.2400.
The technical indicators headed lower within positive territory. MACD decreased which indicates the buyers’ positions weakening. RSI is going downwards which confirms the growing strength of sellers.
We believe bears will keep control over the market during the next days. A close below the support at 1.2400 could see GBP/USD extend its declines down to 1.2300.