Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your experience. Save up to 40% More details

UK Inflation Report Cools Down Pound Sterling

By InstaForex GroupForexMay 19, 2022 03:23AM ET
UK Inflation Report Cools Down Pound Sterling
By InstaForex Group   |  May 19, 2022 03:23AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items

Two months ago, the Bank of England predicted that inflation would reach its peak in April. Yesterday’s report proved the forecast and unveiled a jump to the 40-year high of 9.0% compared to 7.0% in the previous period.

After hitting the peak, the UK inflation should have started falling. However, the regulator foresaw the highest level of just 7.2%, whereas now inflation is well above this reading. In one month, the indicator soared, thus pointing to the acceleration process.

It means that the consumer price growth will hardly slacken in the near future. A faster rise may lead to catastrophic consequences. In other words, there is no wonder that the pound sterling began losing value just after the publication of the report.


The UK inflation figures allowed the US dollar to resume its rally. That is why today, the greenback is expected to climb gradually. What is more, the US unemployment claims data will hardly affect the market situation. The number of first-time claims may increase by 4,000, whereas the number of continuing claims is expected to inch up by 3 thousand.

US continuing claims.
US continuing claims.

After a short-lived stagnation within the resistance level of 1.2500, the pound/dollar pair dropped from it. As a result, the volume of short positions surged, thus enabling the greenback to recover after the recent decline.

The RSI technical indicator downwardly crossed the overbought line on the four-hour chart when the pair started falling. This signal proved sellers’ intention to open more short orders. At the moment, the indicator is hovering near the mid 50 line.

In the same time frame, the Alligator indicator displays an initial signal of the corrective movement completion. In other words, the red and green moving averages intersect. On the daily chart, the indicator is still pointing to the downtrend. The moving averages are heading downwards.


The next jump in the volume of short positions is likely to occur if the price settles below 1.2300 on the four-hour chart. Against the backdrop, the pound sterling may drop deeper to the local low of 1.2155 recorded on May 13.

The alternative scenario will become possible if the price returns to the resistance mentioned above level. In this case, the British currency will have a second chance to prolong its upward correction.

In terms of the complex indicator analysis, technical indicators are signaling sell opportunities in the short-term and intraday periods due to a drop from 1.2500. In the mid-term period, the indicator provides sell signals since the downtrend is still in force.

GBP/USD price chart.
GBP/USD price chart.

UK Inflation Report Cools Down Pound Sterling

Related Articles

InstaForex Group
Pound Sterling To Remain Rangebound By InstaForex Group - Jun 27, 2022

The British pound has been standing still since Thursday. Even Friday's data on UK retail sales failed to impact the price. This is primarily due to mixed statistics. Stagnation...

UK Inflation Report Cools Down Pound Sterling

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
Sign up with Email