The Sterling was trading along the 55-hour SMA early on Wednesday. This lack of sentiment was disrupted massively at 0830GMT when the UK released rather disappointing inflation data. The pair plunged 89 pips in the wake of this release down to the 1.42 mark and had remained near this level by Thursday morning.
It is likely that the Sterling tries to recover some of its losses and in this session, as suggested by bullish technical indicators. However, in case of sluggish Retail Sales, the pair could fall even lower, as no restrictions until the weekly S1 at 1.4111 are apparent on the chart.
This data release might likewise have an opposite effect and thus push the pair past the 55– and 100-hour SMAs and the monthly R1 located at 1.4274. In case of weaker bullish sentiment, this area should hold firm.
