Today (5/19), the UK released inflation data. The most important one is the Consumer Price Index (CPI), which came in negative for the first time since reports of the same format began in 1996. According to Reuters, records show that it is actually the first negative inflation reading on the year since 1960. (Reuters) UK CPI y/y (April): -0.1%Forecast: 0.0%Previous: 0.0%(click to enlarge; source: forexfactory.com) Last week, the Bank of England acknowledged that inflation has been soft, but maintained that it was temporary. It projected inflation to go back to target by 2017. Apparently, this reversal did not happen in April, but the BoE did say it expects inflation to rebound in the second half of the year. The market faded the pound against the USD and JPY today after the inflation report. The USD was also strong, but the GBP/JPY's decline was mainly a pound-weakness story. GBP/USD 4H Chart 5/19(click to enlarge) Note that the GBP/USD was rounding a top prior to the CPI release. After the data points, the bearish correction accelerated and brought the pair to about 1.5450, which is where the 100-period SMA in the 4H chart and a rising trendline reside. Look for support in this 1.54-1.5450 area during the 5/19 session. If price falls below 1.54, we are likely going to see a run towards 1.51. To the upside 1.5625 has become a key pivot. A break above this level can revive the bullish outlook. Failure to do so will put more pressure on the 1.54-1.5450 area. GBP/JPY 4H Chart 5/19(click to enlarge) The weak CPI data helped GBP/JPY put in a price top against a strong uptrend. Now, if price holds below 187.20 for the most part, the price top would be respected as resistance and pressure will be on the 184.40-184.50 support/resistance pivot area, reinforced by a rising trendline and the 100-period SMA. A break below 184 might neutralize the uptrend and put pressure towards the 181-182 area. But for now, we should limit the bearish outlook to the 184-184.50 area, and monitor for support closer to 184.50.