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Oct UK inflation data put more pressure on GBP

Written Walid Salah El Din | 2017-11-14 06:12:27 GMT

The sterling has been already depressed since the beginning of this week by the rising political uncertainty in UK which has been triggered by 40 Conservative lawmakers' decision to sign a letter for withdrawing the confidence in May who can face next leadership challenge.
After May's shocking calling for snap parliament elections on last Jun. 8 three years early before its regular time which ended to losing of her party overall majority in the Parliament.
May was underestimating the opposition against her party and current political stance in UK following the departure referendum, while she was looking for voting to cruise to strong victory can give her a mandate to move Britain through expected long and difficult negotiations over the terms of leaving EU with the other European leaders.
The political concerns which resurfaced again following uprising against May inside her party can keep the pressure on the pound versus its rival currencies while the markets are pricing now on harder Brexit can erode the economic recovery in UK.

The market is waiting now for BOE Chief Governor Mark Carney's comments on these inflation rates, after BOE estimated in its most recent assessment that The inflation is to peak in October above 3%.
The next event for GBP would be the official address about the monetary policy outlook in UK next Thursday, after The MPC decision to raise the interest rate by 0.25% on the second day of this November for the first time since the credit crisis.

After peaking just below its daily SMA50 at 1.3229 on Nov. 10, GBPUSD extended its retreating by falling meanwhile below its daily SMA100, but it's still underpinned over longer range by continued being above its daily SMA200.
GBPUSD is now in its 9th day of continued being below its daily Parabolic SAR (step 0.02, maximum 0.2) which is reading today 1.3250, after failing on Nov. 1 to get over its formed resistance on last at 1.3337
GBPUSD daily RSI-14 is now referring  to lower existence inside the neutral region reading 44.381.
GBPUSD daily Stochastic Oscillator (5, 3, 3) which is more sensitive to the volatility is having now its main line at 42.031 leading to the downside its signal line which is reading 52.146.

Important levels: Daily SMA50 @ 1.3249, Daily SMA100 @ 1.3112 and Daily SMA200 @ 1.2874

S&R:
S1: 1.3021
S2: 1.2775
S3: 1.2588
R1: 1.3229
R2: 1.3337
R3: 1.3655

GBPUSD

Author

Walid Salah El Din
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