COZfx: The pound trading lower after UK data

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COZforex: The pound was lower against the dollar on Tuesday after official data showed that consumer price inflation in the UK rise slightly less-than-expected in June.

GBP/USD hit 1.5046 during European afternoon trade, the session low; the pair subsequently consolidated at 1.5084, slipping 0.10%. Coz forex senior derivatives trader Daniel • Moloney said, GBP/USD is predicted to find support at 1.5046, and a drop through could take it to the next support level of 1.4987. Meanwhile, the pair is predicted to find its first resistance at 1.5147, and a rose through could take it to the next resistance line of 1.5189.

The pound declined to session lows against the dollar earlier after the Office for National Statistics said UK consumer price inflation rise 2.9% from a year earlier in June, coming in below expectations for a 3.0% increase and up from 2.7% in May. The ONS said the increase in annual inflation was driven by higher prices for fuel, clothing and footwear.

Consumer inflation dropped 0.2% on the month, compared to expectations for a 0.1% decline. Core CPI, which excludes food, energy, alcohol, and tobacco costs rise to a seasonally adjusted 2.3% in June, in line with expectations and up from 2.2% in May. The retail price index rise 3.3% last month, slightly below expectations for a 3.4% increase.

The dollar trimmed gains as investors awaited congressional testimony on monetary policy by Federal Reserve Chairman Ben Bernanke on Wednesday, during speculation over the timing of a possible reduction to the bank’s USD85 billion-a-month bond buying program. The dollar fell sharply last week after Bernanke said the U.S. economy still needed monetary stimulus.

The US was also to release official data on consumer price inflation and a report on industrial production.

(COZ forex UK)