The United Kingdom delivered its inflation numbers for August, both core and headline, on a MoM and YoY basis. All readings managed to beat their initial expectations, with the most significant increases seen in the core MoM and the headline YoY figures. The core MoM one came out at +0.7% against the forecasted +0.4%. The headline YoY figure showed up at +3.2%, beating the initial forecast of +2.9%. Despite the initial expectations already being much higher than the previous readings, the actual numbers make some analysts worry that inflation is picking up the pace way too rapidly. The last time the YoY CPI figure was that high was back in April 2012, when the reading came out +3.5%. Following the U.K. inflation and the falling market in Japan, it is interesting how to react to the two currencies of some of the world's largest economies. Yesterday, GBP/JPY reached a key support level at around 149.17, which is 61.8 Fibo level on a daily chart and key support from 20th of August, 20th of July, 23rd of April, and 24th of March. The currency pair is in a downtrend formed by the end of May this year, and the support line of the trend matches with the 50 Fibo levels of correction. If the price bounces back from the current price level, it would be possible to test the resistance trend line again at levels around 151.24 or to test the previous high at around 156.00. But the bears tremble in anticipation of seeing if the price will break current levels, which will activate them, and if this happens, it is possible to see prices around the bottom trend line crossed with 50 Fibo at around. If these price levels don’t stop the downward movement, it is possible to see price levels of 144(38.2 Fibo) or far on South around 141.00 or test the previous low from the end of 2020 around 137.00.
According to the RSI, oscillator indicators show that the price is in the oversold zone and lies on the 30 level.
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According to the RSI, oscillator indicators show that the price is in the oversold zone and lies on the 30 level.
Risk Disclosure: Trading Foreign Exchange (Forex) and Contracts of Difference (CFD's) carry a high-risk level. By registering and signing up, any client affirms their understanding of their own personal accountability for all transactions performed within their account and recognizes the risks associated with trading on such markets and such sites. Furthermore, one understands that the company carries zero influence over transactions, needs, and trading signals. Therefore, it cannot be held liable nor guarantee any profits or losses.
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.