18 July 2018 ( Lagos ) : Repeated signs of easing inflationary pressures in the United Kingdom could plant a seed of doubt among investors about whether the Bank of England will be raising interest rates in August.

UK inflation has unexpectedly held steady at 2.4% for the third consecutive month in June, thanks to cheaper clothing and computer games. With inflation failing to pick up, disappointing wage growth and Brexit uncertainty fueling the bearish sentiment, the British Pound is in trouble. Market expectations are likely to deteriorate further over whether the Bank of England will be taking action next month following today’s inflation report; this could be good news for Sterling bears.

The technical picture looks incredibly bearish, especially when considering how the GBPUSD plummeted to a 10-month low below 1.3020 this morning. Sustained weakness below 1.3030 could inspire a decline towards 1.2900.

Source: Lukman Otunuga, Research Analyst at FXTM

Reporting for EasyKobo on Wednesday, 18 July 2018 in Lagos, Nigeria