UK CPI could put the bears in control

<p>Yesterday saw cable open up 30 pips higher after BoE Governor Mark Carney suggested that rates could still rise despite the low wage growth. This […]</p>

Yesterday saw cable open up 30 pips higher after BoE Governor Mark Carney suggested that rates could still rise despite the low wage growth. This put GBP/USD above the 1.6700 level and it has stayed there from the overnight session in tight ranges.

UK CPI data is due out today and is expected at a 1.8%, from the previous reading of 1.9%, so the bears will be watching closely and could push it back under 1.67 if this is correct.

Overnight the Kiwi slid lower by 30 pips as inflation expectations dipped to 2.2% from the previous reading of 2.4%. The Treasury has announced that it sees smaller budget surpluses. The Kiwi is currently reading around the 0.8440 level.

USD has kept its recent gains against JPY and is now trading around 102.50 after tensions are easing again in Ukraine for now.

US CPI data is released today and is expected a drop to 0.1% from 0.3%. A rise is expected in the core CPI, which excludes food and energy, and is expected to come in at 0.2% from 0.1%. With mixed reactions, it will be hard to see where the markets take us after the release.

Euro continues to be weak after a selloff in EUR/GBP yesterday from the strong pound, and a weak trade balance reported in the eurozone. The pair is currently trading down about 10 pips at 1.3350. With only the current account out today, it’s in the hands of UK and US data.

 

 

EUR/USD

Supports 1.3342 1.3324 1.3296 | Resistance 1.3388 1.3416 1.3434

 

USD/JPY

Supports 102.37 102.11 101.98 | Resistance 102.75 102.89 103.14

 



GBP/USD

Supports 1.6710 1.6698 1.6685 | Resistance 1.6735 1.6748 1.6760

 

Did you know, you can now trade CNH (Chinese Yuan Renminbi) with us?

We’ve just launched CNH as a new forex market, which you can now access across our full suite of trading platforms – including MT4.

Average spread : 7.469 pips*
Average daily range : 73.88 pips*

*average spread and daily range from 21 July to 25 July 2014.

 

Join our live webinars for the latest analysis and trading ideas. Register now

GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.