GBP/USD Fundamental Analysis Jan. 18, 2012, Forecast
Economic Events:
04:30 GBP Average Earnings Index +Bonus 2.0% 2.0%
The Average Earnings Index measures change in the price businesses and the government pay for labor, including bonuses. The Average Earnings figure gives us a good indication of personal income growth during the given month.
A higher than expected reading should be taken as positive/bullish for the GBP, while a lower than expected reading should be taken as negative/bearish for the GBP.
04:30 GBP Claimant Count Change 8.0K 3.0K
Claimant Count Change measures the change in the number of unemployed people in the U.K. during the reported month. A rising trend indicates weakness in the labor market, which has a trickle-down effect on consumer spending and economic growth.
A higher than expected reading should be taken as negative/bearish for the GBP, while lower than expected reading should be taken as positive/bullish for the GBP.
08:30 USD Core PPI (MoM) 0.10% 0.10%
08:30 USD PPI (MoM) 0.10% 0.30%
The Producer Price Index (PPI) measures the change in the price of goods sold by manufacturers. It is a leading indicator of consumer price inflation, which accounts for the majority of overall inflation.
A higher than expected reading should be taken as positive/bullish for the USD, while a lower than expected reading should be taken as negative/bearish for the USD.
09:15 USD Industrial Production (MoM) 0.50% -0.20%
Industrial Production measures the change in the total inflation-adjusted value of output produced by manufacturers, mines, and utilities.
A higher than expected reading should be taken as positive/bullish for the USD, while a lower than expected reading should be taken as negative/bearish for the USD.
Analysis and Recommendations:
There are support levels for tomorrows trading at S: 1.5217 1.525 1.5286
R: 1.5355 1.5388 1.5424
The duo traded in unison with its cousins the EUR/USD. however inflationary pressures is now expected to be used by the BoE as a main reason for boosting the Asset Purchase Facility (APF) in the near-future. Reports today shows that there was over a 4% drop in inflation, a very postive note. The GBP is picking up a bit of steam and is currently trading at 1.5357.
There are is a lot of downward pressure on the Sterling and this is a sell opportunity, as we see the GBP falling against the USD in the near term. The USD is set to rally with just a bit of positive news from the US, we can see the USD start moving up.
Originally posted here
