Sterling Digests Friday's Highs, Eyes On Local Data
FxGrow | Mar 21, 2017 19:06
GBP/USD was on top performance since last Wednesday with +326-pips gains and 1.2435 high yesterday. The pair was jinxed by awakening US Dollar index, surging +$0.23 at 100.16 high weekly highs, currently 100.09 intraday with indications for additional bullish gains. GBP/USD failed to sustain the 1.24 level and plunged today to 1.2354 low.
UK Parliament gave authorization to PM May, set to release article 50 not longer by 29 March which will launch the Brexit process, starting a two-year time frame to get a smooth deal that satisfies both parts (EU and UK). Following the announcement, EU Commission chief spokesman Margaritis Schinas said at a briefing in Brussels that the EU is ready to begin talks "immediately" and that they had a comprehensive plan in place.
GBP/USD levels awaits multiple inflation figures today, including Producer Price Index, Consumer Price Index, and Retail Price Index, all of which will set the tone for GBP today and next week facing reviving USD. Just last week the BOE came out more hawkish than expected. They hinted that there is less of a barrier to rate hikes than some expect with one member voting for a hike outright. Rising inflation is a major concern of the Bank of England as they do not want to get behind the curve. If CPI ticks up over 2% in this reading it could move the pound. UK local data today will set the course for coming BOE interest rates decision and markets could start the process of pricing the market.
Fundamental:
1- GBP CPI today at 9:30 AM GMT.
2- GBP PPI today at 9:30 AM GMT.
3- GBP Public Sector Net Borrowing today at 9:30 AM GMT.
4- GBP RPI y/y today at 9:30 AM GMT.
5- GBP BOE Gov Carney Speech at 10:35 AM GMT.
Technical :
Daily Pp 1.2376
Trend : Bearish Sideways
Resistance levels : R1 1.2399, R2 1.2478, R3 1.2546.
Support levels : S1 1.2324, S2 1.2257, S3 1.2181.
Remark : UK data today not to be missed with indications for GBP/USD levels for the coming days as it will the set the course for BOE coming interest rates decision. Keep an eye on U.S Dollar Index. Closing below S1 is a reminder of last week's retracements and the pair could witness intensive declines and wash towards S2&S3 levels. On the other hand, stalling above R1 level is an indication for trend reversal with additional attacks bullish waves towards R2 level.
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