Pound Dollar Trade Idea: GBP USD Exchange Rate Predicted to Deliver More Losses

As Wednesday's declines are proving, this observation was indeed correct and the team at FuturesTechs wil have notched some gains on their morning trade call.

Today's currency trading idea on GBP-USD is as follows:

• Short Term Trend: Bearish
• Medium Trend: Bullish
• Candlestick Chart says: We posted a Long Legged Doji yesterday, holding the 61.8% retrace but failing at the 50% mark on that strange spike in afternoon trade.
• Profile Charts says: Yesterday's POC at 1.6488 has done a job as support overnight.
• Summary: We would confirm yesterday's Doji on a move through 1.6538.

UK inflation heads lower, sterling exchange rates inch higher

As the provided graph shows, the British pound (Currency:GBP) has struggled for much of the month of March.

But, today's inflation release could provide the UK currency with much-needed support.

"UK inflation fell to 1.7% in line with market forecasts, hitting its lowest levels since October 2009. Inflation is now moving away from the Bank of England’s 2% target, which is something the market had been expecting in the near term. One of the great positives from this fall in inflation is the fact the gap between growth in earnings and inflation is now at its narrowest since April 2010," says Joshua Raymond at City Index.

This had been a significant concern over the past two years, reducing the capacity of consumers.

The narrowing of this gap is extremely welcome for the UK consumer, however for those looking for higher pound sterling exchange rates it will be something of a worry.