Global macro overview for 16/02/2016:
The inflation report delivered from the UK was a mixed bag of data. The PPI came in better than expected ( -0.7m/m, -7.6% y/y vs. -1.2% m/m; -8.6% y/y expected), but the retail price index sank again (-0.7% m/m; 1.3% y/y vs. -0.6% m/m; 1.4% y/y expected). The overall CPI was slightly worse than analysts had expected (-0.8% m/m; 0.3% y/y vs. -0.7% m/m; 0.3% y/y expected), which means the inflation is not picking up as the BoE had forecasted. In conclusion, the data-depended BoE still does not have any fundamental reason to raise the interest rates yet. The March 2016 inflation projections does not seems to be met either.
Let's take a look at the technical picture of GBP/USD after the inflation readings. The market still trades inside the daily trading range and any breakout below the technical support at the level of 1.4350 will help bears regain control. The bigger-time-frame trend is also downward, so the market might accelerate on its way down to the level of 1.4150 where the next support is seen.
