VOT Research Desk
Early European mornings saw the release of UK inflation figures. The Consumer Prices Index (CPI) increased 11.1%, setting a 41-year high, according to the Office for National Statistics (ONS), pushing inflation above five times the Bank of England’s (BoE) target.
This is an improvement over the 10.1% growth in September. In addition, month-over-month CPI inflation rose by 2.0%, up from a 0.5% increase in September. The publication showed a 6.5% increase in the year-over-year core readings (excluding food, energy, alcohol, and tobacco), matching the increase from September.
Naturally, this higher-than-expected inflation reading highlights the possibility of additional interest rate increases by the BoE. (Next meeting is on 15th December). Keep in mind that on March 3, the central bank increased the Bank Rate by 75 basis points. According to the Consumer Prices Index (CPI), on an annual basis, October’s increase of 6.9% matched that of September.
In contrast to September’s gain of 5.4%, core annual inflation rose by 5.3% in October. A last indicator of consumer spending in the US is retail sales, which increased 8.3% annually and 1.3% month-over-month in October.
GBP/USD Averaging $1.19:
The $1.19 currency unit came under attack in Wednesday’s London trading, according to the short-term price action for the GBP/USD currency pair, pushing it to a session high of $1.1942. ( And creating a bull trap).
On the downside, $1.18 demands attention, followed by Quasimodo support at $1.1744, while H1 resistance at $1.2009 is clearly visible above yesterday’s session high.
Additional resistance is visible from the daily timeframe in the area of $1.2052, consisting of a 50% retracement from $1.2052, a 100% projection at $1.2073, and a 1.272% Fibonacci projection at $1.2078. (1.272 is derived from the square root of 1.618, which is the inverse of 0.618).
You will also recognize that a 200-day simple moving average is visible at $1.2238, close north of the mentioned resistance structure.
Relative strength index (RSI) testing the upper limit of resistance between 60.00 and 50.00 has been observed for the daily chart. Venturing above this point could result in the emergence of overbought conditions.
