The average earnings index for the UK (3m/y) came in hotter than expected at 6.4% (6.2% forecast). This is higher than the previous print of 6.1%. Tomorrow sees the annual CPI release, and depending on the number, another 50bps hike on 2 February by the BoE remains a possibility, although the MPC is heavily divided.
Daily GBPUSD candlesticks are trading in the bullish channel, between the upper blue and red bands. The longer this is maintained, the greater the probability of higher cable prices. Hourly chart indicators are also bullish. The trend following EMAs and the momentum based stochastic have crossed up (black ellipses). Assuming the stochastic makes its way to the 80+ region and holds, GBPUSD will have an underlying bullish momentum.
Senior Market Specialist
Russell Shor joined FXCM in October 2017 as a Senior Market Specialist. He is a certified FMVA® and has an Honours Degree in Economics from the University of South Africa. Russell is a full member of the Society of Technical Analysts in the United Kingdom. With over 20 years of financial markets experience, his analysis is of a high standard and quality.