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GBP/USD drops below 1.30 on soft inflation reportThe British pound has finally showed some movement on Wednesday after a week of limited movement. In the European session, GBP/USD is trading at 1.2992, down 0.62% on the day. The pound fell below the symbolic 1.30 level for the first time since August 20. The UK inflation report for September was projected to hit a milestone and fall below the BoE’s 2% target, but the reading exceeded expectations. CPI fell to 1.7% y/y, down from 2.2% in August and below the market estimate of 1.9%. This was the lowest level since April 2021 and was driven by lower prices for petrol and airfares. Services inflation, which has been stubbornly high, dropped from 5.6% y/y to 4.9%, its lowest level since May 2022. Monthly, CPI was flat, below 0.3% in August and below the market estimate of 0.1%. Core CPI also decelerated in September and was lower than expected (3.2% y/y and 0.1% m/m). As well, wage growth slowed to 4.9% in the three months to August, down from 5.1% previously. The Bank of England will be encouraged by the drop in inflation and in wages. The UK economy is groaning under the weight of a cash rate of 5% and the markets are looking at a rate cut in November as a done deal, while a December cut is a strong possibility. Many major central banks have shifted their primary focus from inflation risks to the labor market, and we could see the same with the BoE, now that inflation is back below the BoE’s target. GBP/USD has pushed below support at 1.3071, 1.3039 and 1.3004. The next support level is 1.2972 1.3106 and 1.3138 are the next resistance lines
by OANDA
UK Inflation Softens Across Key Metrics; GBP FallsAccording to a report released by the Office for National Statistics (ONS) this morning, UK inflationary pressures in September eased across all key indicators. This, of course, will be welcomed news for the Chancellor of the Exchequer, Rachel Reeves, as she prepares to deliver her first Annual Budget at the end of the month. CPI Inflation Dips Below BoE Target Headline CPI inflation (Consumer Price Index) slowed to 1.7% (YoY), touching a three-year low and was comfortably lower than the 2.2% reading in August. Opening the door for the Bank of England (BoE) to become a ‘bit more aggressive’ with easing policy, this positions the headline metric below the BoE’s inflation target of 2.0% (first time since April), as well as beneath recent BoE projections (August) and comfortably south of market estimates of 1.9%. Per the BoE’s latest projections, CPI inflation is expected to remain above 2.0% in 2025 and fall below target in 2026. ONS chief economist Grant Fitzner commented: ‘Lower airfares and petrol prices were the biggest driver for this month's fall. These were partially offset by increases for food and non-alcoholic drinks, the first time food price inflation has strengthened since early last year’. Excluding energy, food, alcohol and tobacco, core (YoY) inflation cooled to 3.2%, easing from 3.6% in August (market consensus: 3.4%). Regarding services – a measure that the BoE monitors closely – YoY inflation came in at 4.9% versus 5.2% expected and 5.6% in August. This is quite the drop and represents the first time in over two years that this measure has been south of 5.0%. GBP on the Ropes Following the lower-than-expected inflation data, the GBP (British pound) saw a reasonably strong downside move, with FTSE 100 futures higher. Thirty minutes following the release, the UK government bond market (Gilts) opened with a moderate dovish rate repricing to 24 basis points (bps) of easing compared to 20bps of cuts before the release. This assigns a 90% probability that the BoE will reduce policy by 25bps at 7 November meeting. Following the open, there was some extension to the downside in the GBP. However, while a rate cut is on the table for November, strengthened by comments from BoE Governor Andrew Bailey in September – communicating the central bank could become ‘more aggressive’ and a ‘bit more activist’ in easing policy should inflation continue to subside – ‘the upcoming budget is seen as the final hurdle’, according to Suren Thiru, Economics Director at ICAEW. Thiru added: ‘Rate setters will want to assess the inflationary impact of any measures announced before loosening policy again’. Technically, the GBP/USD is testing key support on the daily chart at US$1.2994. The FP Markets Research Team recently noted, ‘this support level is positioned directly south of the higher low formed on 11 September at US$1.3002, and whipsawing below this base would likely trip stops and provide liquidity (sell orders) for longs at US$1.2994’. The concern for some investors will be price action on the monthly chart navigating below support from US$1.3111.
by FPMarkets
Pound Falls After Inflation ReportPound Falls After Inflation Report The Consumer Price Index (CPI) report for the UK was released today, showing that inflation is decreasing at a faster rate than analysts had predicted. According to data from ForexFactory: → Yearly CPI: actual = 1.7%, forecast = 1.9%, previous = 2.2%; → Yearly Core CPI: actual = 3.2%, forecast = 3.4%, previous = 3.6%. The currency market responded with a decline in the pound sterling against other currencies. Traders likely assume that the Bank of England now has stronger reasons to consider easing its current monetary policy, aimed at curbing inflation. Specifically, the GBP/USD rate fell to its lowest in nearly two months. Technical analysis of the GBP/USD chart shows that: → The price dropped below the psychological level of 1.3000; → It fell beneath the lower boundary of the ascending channel (shown in blue), which had been relevant since May 2024. Resistance could be expected after breaking this line. Bearish momentum may extend into the US trading session. It is possible that the GBP/USD rate could drop further to 1.2900, where the lower boundary of a developing descending channel is becoming clearer on the GBP/USD chart today. This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.
by FXOpen
2
If Sep CPI slows, GBPUSD could fall further The UK's September Claimant Count Change rose to 27.9K, surpassing the market expectation of 20.2K. The UK unemployment rate in August dropped to 4.0%, the lowest level since last April. Attention now turns to the UK's September CPI results, with the market expecting a decrease to 1.9% from the previous 2.2%. If the CPI slows down, it could lead to increased expectations of further rate cuts by the BoE, putting pressure on the pound. GBPUSD showed sluggish consolidation between 1.3030-1.3100 for eight consecutive trading days. The price briefly tested the support at 1.3050, awaiting further price triggers for a rebound. If GBPUSD fails to hold the support at 1.3050, the price may fall further to 1.2960. Conversely, if GBPUSD breaches both EMAs and the resistance at 1.3250, the price could gain upward momentum to 1.3435.
by inkicho_exness
GBPUSD H1 | Bullish Rise Based on the H1 chart analysis, we can see that the price is currently at our buy entry at 1.3067, an overlap support close to the 61.80% Fibonacci retracement. Our take profit will be at 1.3111, an overlap resistance close to 61.8% Fibo retracement. The stop loss will be placed at 1.3030, which is a swing-high resistance." High Risk Investment Warning Trading Forex/CFDs on margin carries a high level of risk and may not be suitable for all investors. Leverage can work against you. Stratos Markets Limited (www.fxcm.com): CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 62% of retail investor accounts lose money when trading CFDs with this provider.You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Stratos Europe Ltd, previously FXCM EU Ltd (www.fxcm.com): CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 59% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Stratos Trading Pty. Limited (www.fxcm.com): Trading FX/CFDs carries significant risks. FXCM AU (AFSL 309763), please read the Financial Services Guide, Product Disclosure Statement, Target Market Determination and Terms of Business at www.fxcm.com Stratos Global LLC (www.fxcm.com): Losses can exceed deposits. Please be advised that the information presented on TradingView is provided to FXCM (‘Company’, ‘we’) by a third-party provider (‘TFA Global Pte Ltd’). Please be reminded that you are solely responsible for the trading decisions on your account. There is a very high degree of risk involved in trading. Any information and/or content is intended entirely for research, educational and informational purposes only and does not constitute investment or consultation advice or investment strategy. The information is not tailored to the investment needs of any specific person and therefore does not involve a consideration of any of the investment objectives, financial situation or needs of any viewer that may receive it. Kindly also note that past performance is not a reliable indicator of future results. Actual results may differ materially from those anticipated in forward-looking or past performance statements. We assume no liability as to the accuracy or completeness of any of the information and/or content provided herein and the Company cannot be held responsible for any omission, mistake nor for any loss or damage including without limitation to any loss of profit which may arise from reliance on any information supplied by TFA Global Pte Ltd. The speaker(s) is neither an employee, agent nor representative of FXCM and is therefore acting independently. The opinions given are their own, constitute general market commentary, and do not constitute the opinion or advice of FXCM or any form of personal or investment advice. FXCM neither endorses nor guarantees offerings of third party speakers, nor is FXCM responsible for the content, veracity or opinions of third-party speakers, presenters or participants.
Long
by FXCM
3
GBP/USD - will inflation data shake up the pound?The British pound has been showing limited movement for over a week. In Tuesday’s North American session, GBP/USD is trading at 1.3086, up 0.13% on the day. The Bank of England has largely won the battle against inflation, which has fallen from double digits at its peak to just 2.2% in August and July. Inflation is expected to dip to 1.9% in September thanks to lower petrol prices, reflective of the decline in crude oil prices. This would be a milestone as inflation has been above the BoE’s target since April 2021. Monthly, inflation is forecast to ease to 0.2%, down from 0.3% in August. Core inflation, which excludes energy and food and is a better indicator of long-term inflation trends, is also expected to decline, from 3.6% to 3.4% y/y and 0.4% to 0.3% m/m. The BoE has cut rates only once this year and if inflation falls below 2% as expected, the calls for the central bank to cut rates will get louder. Inflation is falling, the economy is barely growing and the cash rate remains very high at 5%. The current trend has been to cut rates - the European Central Bank has lowered rates several times and even the Federal Reserve cut in September by 50 basis points. If the BoE doesn’t cut before the end of the year, it risks becoming an outlier among the major central banks. Governor Bailey has made conflicting comments about whether the BoE needs to get moving and  cut rates. It will be interesting to hear the Governor’s reaction to the latest inflation numbers. GBP/USD is testing resistance at 1.3076. Above, there is resistance at 1.3129 1.3016 and 1.2963 are the next support levels
by OANDA