GBP/USD analysis: inflation ok, but what about employment?
|GBP/USD Current price: 1.3270
The GBP/USD trades at fresh 2017 highs by the end of the US session, not far from the early high set at 1.3287. The Pound was supported early Asia by news indicating that the EU withdrawal bill passed smoothly through the House of Commons, with discussions on possible amendments set for next October. For now, however, PM May cached a breath. The pair soared after the release of UK inflation figures for August, as the CPI rebounded to 2.9% yearly basis, from 2.6% in July. For the month, inflation increased by 0.6% from previous -0.1% whilst the core yearly inflation resulted at 2.7%. Inflation at factory gates was also higher than forecasted, up for the first time in six months, with output prices up by 3.4% in the year to August. Speculation that the BOE will have no choice but to raise rates with growing inflation and wages lagging, was behind Pound's rally. The UK will release its latest employment figures this Wednesday, and wages will determinate whether current upward momentum would extend or not. The pair pulled back to 1.3227 early US session, but quickly regained the upside, heading into the Asian opening near the mentioned yearly high. Technically, the pair remains biased higher short term, given that in the 4 hours chart the price met buying interest around a sharply bullish 20 SMA, whilst technical indicators are currently aiming to regain the upside after correcting early overbought conditions. An extension beyond the daily high should expose the 1.3347 level, September 2016 high, while steady gains beyond this last should lead to a sustained rally up to 1.3500.
Support levels: 1.3225 1.3180 1.3140
Resistance levels: 1.3290 1.3345 1.3395
View Live Chart for the GBP/USD
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.