UK CPI Inflation will be announced today. UK CPI is expected to rise to 3.0% (yoy) in September from 2.9% a month ago. The market might show us some fluctuation in the GBP/USD pair after the inflation report is published.
German ZEW index will be published and any realization better than September outcome of 17.0 would be considered good for economic recovery in Germany as it points to a better standing in financial sector’s perception about peripheral Germany
We will also focus on Eurozone inflation today. CPI inflation is expected to be 0.4% in September. whereas (YoY) inflation is expected to stay at 1.5%. A higher than expected reading should be taken as positive for the single currency.
The BOE Carney will speak before the Treasury Select Committee, in London; which might be another trigger for the movements of GBP/USD pair.
Finally, The US Industrial production will be announced as another important data release of today. The market expects industrial production to post 0.3% m/m change in September whereas production decline 0.9% in August. Capacity utilization in the meantime is also expected to rise slightly to 76.2% in September from 76.1% a month ago. A rise in productivity growth would encourage market participants who expect Fed to move with faster paces in the remainder of the year. We may see dollar index to edge up should realization comes in line with expectations.
Technical Analysis:
EUR/USD: The US Dollar has gained more value against the Euro for four days. We will also focus on Eurozone CPI inflation today. In the event that the downward movement continues below 1.1768, the next support level will be at 1.1720. On the other hand, if the price moves up, we will follow the 1.1812 daily resistance level again.
Support: 1.1768 – 1.1720 - 1.1660
Resistance: 1.1812 - 1.1884 – 1.1968
GOLD: The Gold price dropped significantly in the Asian Session and the price is trading below the key level of 1291. As long as the price stays below that level on a four-hourly basis. we will watch 1283 as a support level. On the other hand, if the price goes beyond 1291 again, the next daily resistance level will be at 1307.
Support: 1283 – 1276 – 1276
Resistance: 1291 - 1307
GBP/USD: Ahead of UK CPI data, the GBP/USD pair is trading above the daily support level of 13241. As long as the price stays above 1.3241 on a daily basis the pullbacks may be limited. At this point, we will follow 1.3305 as a resistance level again. On the other hand, if the price drops below 1.3241, the next support level will be at 1.3199.
Support: 1.3241 - 1.3199 - 1.3152
Resistance: 1.3305 – 1.3370 – 1.3433
USD/JPY: The USD/JPY pair bounced back up from the main support level of 111.66 yesterday. The price is now trading just above the 112.08 support level. In the event the upward movement continues above 112.08, we will face resistance level at 112.46. On the other hand, if the price a downward movement, we will face again 111.66 as a daily support level.
Support: 112.08 – 111.66 – 111.28
Resistance : 112.46 – 112.94 – 113.63