GBP/USD Tries for a Profitable End to a Busy Week
GBP/USD Analysis
This week's data-galore from the United Kingdom, revealed that CPI Inflation jumped to 11.1% y/y in October, to the highest level in fort-one years and a full percentage point above the prior month's print. In the latest release earlier today, Retail Sales grew 0.3% m/m in October, a welcome improvement over September's steep slide.
On Thursday, Chancellor Hunt announced a £55 billion tax increase and spending cut plan [1], in an effort to restore confidence and stability, following September's mini-budget fiasco. This had roiled stock and bond markets, had sent GBP/USD to record lows and eventually led to a new Prime Minister.
The Office for Budget Responsibility (OBR) provided its updated outlook for the UK economy, projecting an 1.4% contraction next year and a return to growth in 2024. [2]
GBP/USD consolidated last week's massive gains, showing little reaction to the economic releases and news, with its technical analysis not much changed from our last analysis. Bulls don't have the same vigor, but they try for another profitable week, with the key 1.2052.1.2120 still in their grasp. Further advance however, towards 1.2407, will require fresh impetus.
On the other hand, GBP/USD rejected the aforementioned key resistance area, at the stat of the week, which creates risk for a breach of mid-1.1600s. This would expose it to 1.1510-1.1430, but this area can provide support and the pair seems well protected from there on.
Nikos Tzabouras
Senior Market Specialist
Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and commentary.
With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences.
References
| Retrieved 18 Nov 2022 https://www.gov.uk/government/speeches/the-autumn-statement-2022-speech | |
| Retrieved 29 May 2023 https://obr.uk/overview-of-the-november-2022-economic-and-fiscal-outlook/ |
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