Global macro overview for 19/08/2015:
The sterling rallied yesterday after inflation data beat expectations. Moreover, the market now might anticipate a more probable BoE interest rate hike in the coming months. The core inflation peaked at a five-moth high, while the consumer inflation rose 0,1% instead of staying flat at 0%. In his latest economic outlook, BoE governor Mark Carney stated that the inflation will remain low or flat until the end of the year as the British pound speculations could persist a little longer. Nevertheless, leaving the rates at a low level in order to wait for the BoE 2% inflation target would not be healthy for the UK economic recovery in the long term, so the BoE might wait for the US Fed to raise the rates first and then follow up.
The technical picture of GBP/USD is getting more clear now as the demand break-through zone has been finally violated. If the bullish sentiment persists, this pair should soon test the next resistance at the level of 1.5790.