The United Kingdom, the Office for National Statistics will release a spate of inflation data at 08:30 GMT. This will include the retail price index, producer price index and consumer price index for the month of March. How would these data impact the GBPUSD pair? Find out with this 18 April GBPUSD Fundamental Outlook.
18 April, GKFX – The GBP/USD pair stalled its tepid recovery and now retreats towards yesterday’s low of 1.4283, as the investors believe that the recent GBP buying has been overdone on Brexit optimism and increased expectations of a Bank of England (BOE) May rate hike.
UK inflation report
Moreover, markets look to take profits off the table after the solid run up to fresh post-Brexit vote tops of 1.4377, as the focus shifts towards the UK inflation report due at 0830 GMT. Markets are expecting a flat reading for the UK’s March CPI report.
Also, a BOE May rate hike is already priced-in by the markets and hence, a further corrective move lower cannot be ruled out. The reversal in Cable from multi-month tops was fuelled yesterday by the below estimates UK average weekly earnings report.
However, the persisting risk-on rally in global equities could keep the corrective slide limited, with markets awaiting the sentiment on the European open.
18 April GBPUSD Fundamental Outlook
Jim Langlands at FX Charts writes,
“the short-term charts now look a little heavy and, back below 1.4280 would hint at a possible to the Fibo levels at 1.4220, and then to 1.4200 and 1.4160 ahead of more substantial, Fibo support at 1.4120.
On a more cautious mote, it could be that the daily charts are now showing some bearish divergence, hinting that a medium-term top may already be in place and I do not think we are going back above 1.4375 today, so for a day trade, I would look to sell a rally towards 1.4350 with an SL at 1.4380.”
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