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GBPUSD Price Action Tepid After UK Inflation Misses Forecasts, Brexit Lull

GBPUSD Price Action Tepid After UK Inflation Misses Forecasts, Brexit Lull

2019-04-17 09:05:00
Nick Cawley, Strategist

GBP Price, News and Latest UK Inflation Analysis

  • UK CPI remains unchanged, and misses expectations, after Tuesday’s strong UK jobs and wages data.
  • GBPUSD still underpinned around 1.3000 and waits for the next chapter in the Brexit saga.

Q2 2019 GBP Forecast and USD Top Trading Opportunities

British Pound (GBP) Ignores Inflation Data.

UK headline inflation and core inflation both missed slightly higher expectations and remained at the same level as last month, according to the latest data released by the ONS. Rising fuel and clothing prices were offset by lower contributions from a range of recreational and cultural goods, food and motor vehicles, according to the release.

GBPUSD Price Action Tepid After UK Inflation Misses Forecasts, Brexit Lull

On Tuesday, data showed that the UK jobs marker remains robust with the number of people in work continuing to grow. Unemployment fell to 3.9%, the joint-lowest level since mid-1970s, while UK wages continue to grow, but in real-terms, remain under the pre-downturn peak. Rising average wages and an unchanged inflation read will give the UK consumer more spending power and will need to be watched by the Bank of England in the coming months for signs of domestic, consumer-led price pressures.

ONS – Labour Market Summary.

Brexit news has taken a back-seat this week with the UK Parliament in recess for Easter. Talks in the House of Commons will continue next Tuesday against a background of a split between Conservative and Labour over workers’ rights and a customs union. Sterling turned South Tuesday after a newspaper report, later denied, said that the two parties were finding a consensus difficult to find due to UK PM May’s refusal to shift on her red lines.

GBPUSD continues to respect the 1.3000 level although it is under pressure within a recent downward wedge. A break and close below 1.3000 and then the March 11 low/200-day moving average at 1.2960 could see prices drift further lower and test the 23.6% Fibonacci retracement level at 1.2894. To the upside a cluster of closes back to 1.3136 should temper any rally.

Sterling Weekly Technical Outlook: GBPUSD, EURGBP and GBPJPY.

GBPUSD Daily Price Chart (July 2018 – April 17, 2019)

GBPUSD Price Action Tepid After UK Inflation Misses Forecasts, Brexit Lull

Retail traders are 72.9% net-long GBPUSD according to the latest IG Client Sentiment Data, a bearish contrarian indicator. See how recent daily and weekly positional changes affect GBPUSD sentiment.

Traders may be interested in two of our trading guides – Traits of Successful Traders and Top Trading Lessons – while technical analysts are likely to be interested in our latest Elliott Wave Guide.

What is your view on Sterling (GBP) – bullish or bearish?? You can let us know via the form at the end of this piece or you can contact the author at nicholas.cawley@ig.comor via Twitter @nickcawley1.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.