GBPUSD, 30M
Sterling is seen spiking higher on the anticipation of the announcement for inflation data out of UK earlier. The Sterling has started the week on a settled footing after Her Majesty’s currency finished last week under pressure. It was near flat to the dollar and euro, showing a 0.2% decline versus the yen until the spike seen today. Today however, the Cable extended higher up to 1.3900 level, however based on very short time-frame, the upwards move has been seen reversing immediately, on the announcement of the actual CPI, PPI data and Retail Sales as well.
UK January CPI unexpectedly remained at 3.0% y/y, the same as in December contrary to the median forecast for a dip to 2.9% y/y. Core CPI also lifted to 2.7% y/y from 2.5%, above the expected 2.6% y/y rate. The outcome still fits BoE projections, which ultimately expects CPI to decline to 2.2% y/y by Q1 2020. PPI data showed input prices gaining 4.7% y/y, down form 5.4% y/y in the month prior, and output prices rising 2.8% y/y, down from 3.3% in December. The above-forecast headline sparked a rally in sterling, which gained about 40 pips versus the dollar in the wake of the data release. The data follows the BoE’s hawkish guidance shift last week, which said monetary policy may have to be tightened sooner and by more than envisaged previously as a consequence of rising demand and lacklustre productivity.
Nevertheless, despite this move lower by 35 pips on the bottom of the hour, the pair manage to be held above today’s lows, and above the 200-period EMA, in the 30-Minutes chart, and in the 4-hour chart as well. The GBPUSD managed to cross up to the upper Bollinger Bands pattern in every intra-day chart, while it broke above the latest swing highs on the 30-Minute and hourly chart It is currently testing the round 1.3900 level.Therefore an hourly closing above this level, could triggered a long position up to 1.3940 (50-period EMA in the hourly chart). In a Daily timeframe, a closed today above 1.3900, suggest a retest of the 1.4000 level and the 50% retracement level at 1.4040, since January 25.
Short-term momentum indicators are indicating further upside momentum, with Stochastic indicator crossing the overbought terittory while MACD oscillator has turn positive.
Click here to access the HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE! The next webinar will start in:
[ujicountdown id=”Next Webinar” expire=”2018/02/13 11:00″ hide=”true” url=”” subscr=”” recurring=”” rectype=”second” repeats=””]
Andria Pichidi
Market Analyst
HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
