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.
04:00 EUR Italian Trade Balance -0.94B -1.08B
The Italian Trade Balance measures the difference in value between imported and exported goods during the reported month.
A higher than expected reading should be taken as positive/bullish for the EUR, while a lower than expected reading should be taken as negative/bearish for the EUR.
Analysis and Recommendations:
There are support and resistance levels are S: 0.8286 0.829 0.8294
R: 0.8302 0.8306 0.831
Sterling was down against the euro with EUR/GBP adding 0.37%, to hit 0.8297. Official data showed that the annual rate of consumer price inflation in the U.K. declined to 4.2% in December, from 4.8% the previous month. The decline supported the Bank of England’s view that inflation will fall off sharply in 2012, allowing the bank to ease monetary policy further.
This pair will trade in tandem for a while. No trade is evident here.
Originally posted here
