Global macro overview for 22/03/2016:
The UK inflation rate was unexpectedly unchanged in February, remaining far below the Bank of England's 2 percent goal.The Office for National Statistics revealed this morning that the consumer price index was at the level of 0.3% (vs. 0.4% expected and 0.3% prior). Core inflation, which excludes volatile food and energy prices, remained at the level of 1.2 percent. In conclusion, the inflation level has been stubbornly low for the last two years, largely due to lower oil prices. The BoE Governor Mark Carney reiterated last week that there are low chances that the interest rate will be cut or that it will enter the negative territory. Thus,the next move should result in a long-time rate increase.
Let's now take a look at the technical picture of the GBP/USD pair at 4h time frame. After making a new local high at the level of 1.4515 the market has fallen toward the 50%Fibo at the level of 1.4290, breaking the support at the level of 1.4427 with ease. Currently, it looks like bears want to push the prices even further down, towards the 61%Fibo at the level of 1.4229. Any breakout below this level will result in an immediate test of the golden trend line.