The Pound Sterling (GBP) bounced back strongly after the UK’s March Consumer Price Index (CPI) showed a slower-than-expected decline, despite easing from February levels. This suggests that the Bank of England’s (BoE) higher interest rate policy may be starting to curb inflation.

Key Factors:

• Inflation Easing: While still elevated, the decline in both consumer and producer price inflation indicates waning price pressures.
• BoE Impact: The figures support the view that the BoE’s aggressive rate hikes are having the desired effect.

Technical Analysis:

• Rebound from Support: GBP/USD demonstrates strong buying near the crucial 1.2400 support level.
• Limited Upside: Resistance near the 1.2500 psychological barrier and the breakdown region of the Head and Shoulders pattern may cap gains.
• Bearish Bias: The long-term outlook remains bearish due to the break below the 200-day Exponential Moving Average (EMA).
• RSI Indicator: The Relative Strength Index (RSI) in the bearish range suggests downside momentum remains in play.