Global macro overview for 14/12/2016:
According to the Office for National Statistics, the Consumer Price Index in the UK increased 1.2% in November, while analysts expected the climb to 1.1% after a 0.9% increase in October. This reading is the highest figure since 2014. The biggest factor behind this result is higher price of clothes, up by 1.6% in November. Other main contributors were motor fuels and a 'variety of recreational and cultural goods and services', including hotel and restaurant charges. The last contribution comes from falling price of the pound sterling since Brexit. In conclusion, the inflation is clearly accelerating in the UK and this situation is welcomed by BoE as they expect consumer inflation to reach 1.7% in 2017.
Let's now take a look at the GBP/USD technical picture in 4H time frame. The market keeps trading in a tight sideways range between the levels of 1.2546 and 1.2772. The 50% Fibo rejection is a clear indicator of bears trying to take back the control over this market. Only a clear break out above the technical resistance at the level of 1.2772 would invalidate the bearish bias.
