Broker of the Week Oanda - Read Full Review

Free Top Brokers Comparison Service


Trend Higher Intact, UK Inflation Above Expectations


GBP price, UK inflation, news and analysis:

  • UK inflation in December was higher than in November and above analysts’ expectations, with the headline rate up 0.6% year/year.
  • That is positive for GBP/USD, which continues to rise within the upward-sloping channel on the daily chart that has been in place since late September last year.

GBP/USD advancing, UK inflation higher than predicted

UK inflation in December was higher than in November and above the expectations of analysts polled by the news agencies, with the headline rate climbing to 0.6% year/year compared with the previous 0.3% and the forecast 0.5%.

In normal times an increase in inflation might be expected to spur talk of tighter monetary policy, but with the rate still extremely low and the coronavirus pandemic still the focus of attention that is not going to happen.

UK inflation rises

UK inflation data.

Source: DailyFX

{{GUIDE|GBP |Download our fresh Q1 GBP forecast}}

Nonetheless, the data will do no harm to GBP/USD, which is still rising within the upward-sloping channel on the daily chart in place since late September last year.

GBP/USD Price Chart, Daily Timeframe (September 7, 2020 – January 20, 2021)

Latest GBP/USD price chart.

Source: IG (You can click on it for a larger image)

As the chart above shows, GBP/USD could reach the 1.38 level in due course. Note, though, that it first needs to break minor resistance around 1.3715, where the price peaked six days ago.

of clients are net long.

of clients are net short.

Change in Longs Shorts OI
Daily -3% 16% 6%
Weekly 35% -19% 0%

Risk on in markets

Like many other currencies, GBP has been helped by the current risk-on tone in the markets generated by the prospect of a large injection of money into the US economy and by the rollout of coronavirus vaccines. Those factors continue to outweigh any bad news such as the extension of Covid-19 restrictions in Germany, and will likely continue to do so.

Find out here how to read an economic calendar

We look at currencies regularly in the DailyFX Trading Global Markets Decoded podcasts that you can find here on Apple or wherever you go for your podcasts

— Written by Martin Essex, Analyst

Feel free to contact me on Twitter @MartinSEssex


Source link

We will be happy to hear your thoughts

Leave a reply

Trading foreign exchange on margin carries a HIGH LEVEL OF RISK, and may not be suitable for all investors. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. You could sustain a loss of some or all of your initial investment and should not invest money that you cannot afford to lose.

Advertiser Disclosure: helps investors across the globe by spending over hours each month testing and researching online brokers.

How do we make money? Our partners compensate us through paid advertising.

While partners may pay to provide offers or be featured, e.g. exclusive offers, they cannot pay to alter our recommendations, advice, ratings, or any other content throughout the site.

Furthermore, our content and research teams do not participate in any advertising planning nor are they permitted access to advertising campaign data.

Disclaimer: It is our organization’s primary mission to provide reviews, commentary, and analysis that are unbiased and objective.

While has some data verified by industry participants, it can vary from time to time.

Operating as an online business, this site may be compensated through third-party advertisers.

Our receipt of such compensation shall not be construed as an endorsement or recommendation by, nor shall it bias our reviews, analysis, and opinions.

Best Forex Brokers Reviews
Reset Password
Compare items
  • Total (0)