The data here sees GBP/USD fall from 1.2710 to 1.2675 currently, with the low touching 1.2655 just after the release. There were notable misses on both the headline and core annual inflation readings, helping to vindicate traders in thinking of sooner rather than later rate cuts by the BOE.
That being said, core annual inflation is still sitting at just above 5% and that is on the higher side as compared to the US and Eurozone in particular. Yet, traders were seeing ~65% odds of a BOE rate cut in May and I reckon that will be sped up once the market open later reflects the movement after the data above.
Going back to GBP/USD, price has now dropped back below its 100-hour moving average (red line) of 1.2703 and that sees the near-term bias shift back to being more neutral. In other words, sellers have wrestled back some semblance of control again.
The key downside support level to watch now will be the 200-hour moving average (blue line) at 1.2632 next. A drop below that will provide a further technical setback for GBP/USD with sellers able to target 1.2500 next once again. The 200-day moving average is at 1.2510.
