The volatility in the GBP/USD pair still exists below the resistance 1.2550. Today GBP had a massive fall after the news CPI report came with a lower figure of 1.8%, which was expected to be 1.9%. The RPI was also published with lower figure 2.6%, which was expected 2.8% as well as Core CPI had result of 1.6% which was expected 1.7%. Though PPI input was quite in a positive side with 1.7% which was expected to be 1%, it did not affect the GBP performance as the previous value was 2.7%. Overall, fundamentally GBP had a very bad day with negative reports where USD gained a good amount of strength against it. Today FED chair Yellen will be testifying the monetary policy which is expected to have hawkish effect on USD to regain some USD strength for the week.
Now let us look at the technical view, after rejecting the resistance area between 1.2515-50 area, once again GBP has lost its ground against the USD. With negative economic reports GBP were weak against USD and ahead of Yellen's speech it is expected that USD is going to gain a good amount of strength against GBP. Currently, it is expected that the price will reach the support 1.2410-20 area and if the price breaks this support area there will be more downward move in this pair. On the other hand, if the price rejects from the 1.2410-20 area we might see some corrective structure between the 1.2515 resistance and 1.2410-20 support area.
