Breaking News

GBP Surges As Inflation Accelerates Traders Look To Wages

By ORBEXMarket OverviewSep 13, 2017 04:56AM ET
GBP Surges As Inflation Accelerates Traders Look To Wages
By ORBEX   |  Sep 13, 2017 04:56AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items

The British pound maintained strong gains as the currency pair was seen trading above $1.3300. The gains came after the monthly inflation data showed a strong increase overall. Headline consumer prices accelerated 2.9%, rising sharply from 2.6% the month before and beating estimates of 2.8% increase. The core CPI also increased sharply, rising 2.7% on the month. PPI input and output prices also increased significantly suggesting that inflation in the coming months will continue to rise further.

Looking ahead, the economic data today will see the UK's labor market statistics. The average earnings will be the main focus with economists forecasting an increase in wages by 2.3%. However, with yesterday's inflation rising faster than expected, wage growth continues to lag. Elsewhere, in the US trading session, the monthly producer prices data will be released today. Overall, the data is expected to show that inflation at factory gate might have increased in August, following amodest decline the month before.

EUR/USD Intraday Analysis

EUR/USD 4 Hour Chart
EUR/USD 4 Hour Chart

EUR/USD (1.1982) closed with some minor gains yesterday, and price action is looking to retest the 1.2058 resistance level once again. The strong consolidation near this resistance level suggests that the bullish momentum could be intact. The reversal near the minor support at 1.1936 shows a potential cup and handle pattern in the making.

Price needs to breakout above 1.2058 in order to push higher. This also puts the minimum upside in EUR/USD towards 1.2180 - 1.2200. However, in the event that EUR/USD fails to breakout above 1.2058, we can expect the consolidation to keep the currency pair trading flat within 1.2058 and 1.1882 levels of resistance and support.

GBP/USD Intraday Analysis

GBP/USD 4 Hour Chart
GBP/USD 4 Hour Chart

GBP/USD (1.3309) maintained the strong gains yesterday. The gains came as the UK's parliament voted on the new Brexit bill. The faster than expected inflation data also added to the bullish sentiment. Having cleared the 1.3300 level, the British pound could be seen posting higher gains. However, watch for a potential retest towards 1.3236 levels which could now be tested for support.

This level initially served as resistance, but the price action shows the strong breach of this resistance which came on the back of the inflation data. Thus, it is quite likely that the GBP/USD could be seen falling back to this support level ahead of maintaining further gains. In the event that GBP/USD slips below 1.3236, then expect prices to consolidate above the support level of 1.3161.

XAU/USD Intra-Day Analysis

XAU/USD 4 Hour Chart
XAU/USD 4 Hour Chart

XAU/USD (1332.13) Gold prices gapped down at the start of the week, but price action is showing a sign of reversal after support looks to be established at 1324.72. This completes the gap from September 1st and looks to be a minor support level that has been established. It also puts the bias in gold to the upside in the near term. The support at 1324.72 also coincides with the lower median line which also offers a dynamic support level. A rebound is, therefore, expected which will see gold prices pushing higher to retest the 1345.87 resistance level.

A retest of this level will fill the gap from Friday's close. Gold prices are likely to remain range bound in the near term within the 1345.87 and 1324.72 levels of resistance and support. A breakout off these levels will suggest further gains or declines to come. The bias, however, remains to the downside with gold prices likely to target 1300.00 region of support which is pending a retest.

GBP Surges As Inflation Accelerates Traders Look To Wages
GBP Surges As Inflation Accelerates Traders Look To Wages

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Are you sure you want to delete this chart?
Write your thoughts here
Replace the attached chart with a new chart ?
Post also to:
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Post 1000
Please wait a minute before you try to comment again.
Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Add Chart to Comment

Continue with Google
Sign up with Email