GBP/USD unable to recover, back near key support

GBP/USD printed a fresh daily low at 1.2378 and then rebounded rising back above 1.2400. It was trading around 1.2415/20 down 70 pips for the day and still near the 1.2350 area that has become a relevant short-term support zone. 

During the last hours the pair has been moving with a downside bias, but with limited declines. The pound managed to recover ground during the last hours against the euro, the Swiss franc and the yen. 

Inflation data from the UK showed a lower-than-expected headline in the CPI but the Producer Price Index showed larger-than-expected gains. In line with the numbers, Mark Carney, governor of the Bank of England (BoE) said today that the central bank has a neutral bias regarding monetary policy and he affirmed that inflation will rise in the coming months. 

In the US, retails sales rose 0.8% in October, above expectation and previous data was revised higher, increasing the expectation of a rate hike in December from the Federal Reserve. The economic numbers gave support to the US dollar. 

Technical levels

To the upside, resistance levels might lie at 1.2455 (20-hour moving average), 1.2500 (European session high) and 1.2525/30 (daily high). On the opposite direction, support might be seen at 1.2375/80 (daily low), 1.2350 (Nov 09 low) and 1.2335 (20-day moving average).

To learn more about this topic, check our video analysis.