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GBPUSD : Extending Losses After Inflation Data But Falling Wedge Pauses Decline

GBPUSD : Daily Chart

GBPUSD extending losses today on the daily chart and currently testing the key support from the support trend line of the falling wedge. A falling wedge pattern gives a bullish signal according to which the pair should surge breaking above the resistance trend line of the wedge. However there is another key support at 1.5886 which might prevent the pair in declining further as it did previously also.

The losses came after the release of U.K. inflation data which slowed to the five year low last month and on the other hand global growth concern continue to support the demand for US dollar. The official data showed that the rate of consumer price inflation slowed to 1.2% in September from 1.5% in August which economists were expecting to decline to 1.4% in September. Core CPI which excludes volatile items like Food and energy rose at the rate of 1.5% declining from 1.9% in August. Economists were expecting the core prices to rise by 1.8% in September.

If the pair rises from the support trend line of the wedge,we might see some surge and the pair might break above the falling wedge however if it continues to decline below the support at 1.5886, the bullish signal from the falling wedge will fade away.