GBP/USD – Pound Flat as British CPI Meets Expectations

GBP/USD is flat on Tuesday, as the pair trades in the mid-1.56 range. On the release front, British CPI edged above the forecast, posting a gain of 1.3%. In the US, the Producer Price Index posted a gain of 0.2%, beating expectations.

On Tuesday, the UK released a host of inflation indicators, led by CPI, the primary gauge of consumer inflation. There were no surprised, as all of the indicators met expectations. The index improved to 1.3%, just above the estimate of 1.2%, which was the reading last month. Although the increase was marginal, it ended a streak of three straight readings where CPI has weakened.  The pound shrugged off the readings, and remains close to 14-month lows. Last week, the BoE Inflation Report was unexpectedly dovish, resulting in the pound tumbling over 100 points.

US inflation numbers have been persistently weak, but the news was good on Tuesday, as PPI beat expectations with a modest gain of 0.2%. This marked a 4-month high and beat the estimate of -0.1%. Core PPI, which excludes the most volatile items counted in PPI, posted a gain of 0.4%, above the forecast of 0.2%. This was the index’s best showing since April. We’ll get a look at consumer inflation data on Thursday.

GBP/USD for Tuesday, November 18, 2014

GBP/USD November 18 at 16:45 GMT

GBP/USD 1.5649 H: 1.5679 L: 1.5631

 

GBP/USD Technical

S3 S2 S1 R1 R2 R3
1.5392 1.5505 1.5644 1.5717 1.5864 1.6000

 

  • GBP/USD is showing very little movement. The pair tested support at 1.5644 during the day.
  • 1.5717 is the next resistance line.
  • On the downside, 1.5644 remains fluid. Will the pair break below this line? 1.5505 is stronger.
  • Current range: 1.5644 to 1.5717

Further levels in both directions:

  • Below: 1.5644, 1.5505, 1.5392 and 1.5282
  • Above: 1.5717, 1.5864, 1.6000, 1.6141 and 1.6263

 

OANDA’s Open Positions Ratio

GBP/USD ratio is almost unchanged on Tuesday, continuing the trend we have seen since the start of the week. This is consistent with the lack of activity displayed by GBP/USD. The ratio is pointing to a majority of long positions, indicative of trader bias towards the pound moving higher.

 

GBP/USD Fundamentals

  • 9:30 British CPI. Estimate 1.2%. Actual 1.3%.
  • 9:30 British PPI Input. Estimate -1.4%. Actual -1.5%.
  • 9:30 British RPI. Estimate 2.3%. Actual 2.3%.
  • 9:30 British Core CPI. Estimate 1.6%. Actual 1.5%.
  • 9:30 British HPI. Estimate 12.1%. Actual 12.1%.
  • 9:30 British PPI Output. Estimate -0.3%. Actual -0.2%.
  • 13:30 US PPI. Estimate -0.1%. Actual +0.2%.
  • 13:30 US Core PPI. Estimate 0.2%. Actual 0.4%.
  • 15:00 US NAHB Housing Market Index. Estimate 55 points. Actual 58 points.
  • 18:30 US FOMC Member Narayana Kocherlakota Speaks.
  • 19:05 BoC Deputy Governor Agathe Cote Speaks.
  • 21:00 US TIC Long-Term Purchases. Estimate 41.3B.

* Key releases are highlighted in bold

*All release times are GMT

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Kenny Fisher

Kenny Fisher

Currency Analyst at Market Pulse
Kenny Fisher joined OANDA in 2012 as a Currency Analyst. Kenny writes a daily column about current economic and political developments affecting the major currency pairs, with a focus on fundamental analysis. Kenny began his career in forex at Bendix Foreign Exchange in Toronto, where he worked as a Corporate Account Manager for over seven years.