Global Markets

Sterling bulls were installed with some inspiration despite UK CPI data remaining negative at -0.1% in October. Even though this release did in fact match expectations, CPI has stayed below 0% for the second successive month and, as a result, some fears may have been reinforced about the potential slowdown in economic momentum in the UK economy. The continuous decline in commodity prices complimented with a strong Pound has been part of the attributes which have sabotaged UK inflation targets. Expectations for a rise in UK interest rates have already been pushed back until deep into 2016 and today may have provided the Bank of England a compelling reason to push expectations further as inflation has failed to flourish in the UK economy.

Later today during the US session, most focus will be on the US economy where the latest inflation data will be released. The rising optimism over the increased possibility of a US interest rate rise in December has empowered the USD bulls and this can be reflected in the Dollar Index which has rallied towards 100. If the CPI result today for the States exceeds expectations then the Dollar may experience a sharp appreciation across the global currency markets as investors jump on the possibility that US interest rates will be increased in December.


The GBPUSD experienced a sharp bounce despite UK CPI data for October remaining in negative territory. The pair still remains technically bearish on the daily timeframe as lower lows and lower highs have been created. Prices have found some resistance below the daily 20 and 200 SMA, with the MACD already pointing to the downside. If the candlesticks can keep below the 50 Fibonacci retracement level there may be a decline back to 1.5100.


The GBPJPY is technically bullish on the daily timeframe and has respected the bullish channel. Prices hit the 187.50 resistance which we discussed last week and a breakout above this level may open a path to 191.00. The candlesticks have found support above the daily 20 and 200 SMA, with the MACD already pointing to the upside. 


The GBPCHF hit the target discussed in last week’s report. The pair still remains technically bullish on the daily timeframe as long as bulls can keep above the 1.5200 support. A breakout above 1.5400 may invite an opportunity for buyers to send prices to 1.5500.


The GBPNZD is technically bullish on the daily timeframe. Prices are trading above the daily 20 SMA and the MACD has crossed to the upside. A breakout above the 2.3500 resistance may invite an opportunity for buyer to send prices towards 2.4000.

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