FUNDAMENTAL BEAM
GBP/USD
bounced back and crossed above the 1.60 level, gaining about one cent
last week. The pair closed at 1.6018. This week’s key events include
CPI, Claimant Count Change and Retail Sales. Here is an outlook for the
main events moving the pound, and an updated technical analysis for
GBP/USD.
British Construction and Services PMIs continued to look sharp,
giving the pound a boost. The US dollar made up some ground late in the
week as NFPs soared on Friday.
Here is a summary of major events during the week
- RICS House Price Balance: Tuesday, 00:01. This housing inflation indicator is an important gauge of the UK housing market. The index continues to climb nicely and hit 54% last month. The upward trend is expected to continue, with an estimate of 59%.
- CPI: Tuesday, 9:30. This key inflation indicator is the first major event of the week. CPI has been very steady, with two consecutive readings of 2.7%. The markets are expecting a lower figure for October, with an estimate of 2.5%.
- PPI Input: Tuesday, 9:30. The Producer Price Index Input has looked weak of late, with two straight declines. The September reading of -1.2% was well below the estimate of -0.1%. The markets are expecting another decline in October, with an estimate of -0.3%.
- RPI: Tuesday, 9:30. The Retail Price Index has been hovering slightly above the 3% level in recent releases. The markets are anticipating a slightly lower reading in October, with a forecast of 3.0%.
- CB Leading Index: Tuesday, 10:00. Leading Index is made of 7 indicators, but it is considered a minor event because most of the data has already been released. The index jumped 1.2% in September, a multi-year high. The markets will be hoping for another strong release this week.
- Claimant Count Change: Wednesday, 9:30. This is one of the most important economic indicators, and can affect the movement of GBP/USD. The indicator continues to post declines, and posted an excellent reading in September of -41.7 thousand, easily beating the estimate of -24.3 thousand. The markets are expecting another strong release in October, with an estimate of -30.2 thousand. The Unemployment Rate is expected to remain at 7.7%.
- Average Earnings Index: Wednesday, 9:30. This consumer inflation indicator dropped to 0.7% last month, missing the estimate of 1.0%. This marked a five-month low for the indicator. No change is expected in the October reading.
- BOE Inflation Report: Wednesday, 10:30. The Inflation Report is a key release, issued every quarter. The report detail the Bank’s forecast for inflation and economic growth in the UK over the next 2 years. Governor Mark Carney will host a press conference following the report’s release.
- Retail Sales: Thursday, 9:30. Retail Sales has had a bumpy road, showing some fluctuation. The previous release came in at 0.6%, edging past the estimate of 0.5%. The markets are bracing for a weak gain of just 0.2% for October.
TECHNICAL BEAM
As expected the GBPUSD open the week trading on a positive note gravitating towards an intermediate resistance point. Price however was repelled by a resistance at 1.6115 thereby forcing it down almost close to the week start. This bear resistance-looking at the fundamental news release of the NFP-is not far fetched as the Greenback soared against major currencies world over.
This week is entirely a different ball game and we expect a near to completion market behavior for GBPUSD as seen in our analytical chart above. Bullish sentiments may continue to rise up to the technical resistance at 1.6386. If this pattern comes to completion this week; we might expect that a bearish wave X leg to set in thereby starting a new trending bearish pattern altogether.
NOTE: Price
predictions produced by FibonacciPrice&PatternTrader may be
affected by unforseen events like hurricane, earth quake, flood and
other natural disasters consequently changing price patterns already
predicted. Hence we advice strict adherence to money management
techniques.
HAPPY TRADING
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