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Heady Days of Economic Calendar in the US. The EURGBP and GBPUSD Analysis

Aug 13 2019, 06:37 PM (+06) |

As we mentioned in our analysis yesterday, the day began with the German CPI, which came out in line with the forecasts at the same level of 0.5%. A few hours later, Great Britain released 3 reports with data on employment. The Claimant Count measures the number of unemployed people claiming unemployment related benefits. This result was 28.0K, which is better than expected.

Employment Change 3M/3M also came out at the better than expected level of 115K. This report represents the 3-month moving average of the employed people compared to the same period last year.

While the U.K. Unemployment report data came out at 3.9%, which is worse than the forecast. It measures the labor force that was unemployed and actively looking for a job during the previous three months.

These mixed figures were followed by the ZEW Economic Sentiment report in the euro zone. This index rates the relative six-month economic outlook for the euro zone. The result of -43.6 was twice worse than analysts had expected. A reading above zero is optimistic versus a reading below zero. The previous reading was -20.3.

The EUR/GBP pair did not react to this news and remained flat for the past 24 hours. The 9-EMA is at the center of the price, remaining above the 20-EMA and following our local trend line up.

Now let’s speak about the USD, as you should be prepared for the important releases of this week. Today, the United Stated releases data on the Consumer Price Index. Again, there are several numbers and reports, let’s focus on them.

The CPI is an index that measures changes in the price of goods and services.

Core CPI measures the change in the price of goods and services, excluding food and energy. This is because food and energy prices tend to fluctuate in a volatile manner, and they are also considered to be bare necessities–as people have to eat to survive. And you’ll have to fill your gas tank even if the price of gas goes up in order to get from point A to point B.

So, we get a better understanding of inflation by means of excluding food and energy from the CPI report. The report will come out at 12:30 GMT.

August 14 is time to check the report on US Crude Oil Inventories, which comes out at 14:30 GMT. And Thursday is the really interesting day for the USD.

The United States releases Core Retail Sales, Initial Jobless Claims, and Industrial Production at 12:30 and 13:15 GMT respectively on August 15, along with other reports of medium volatility.

Friday is the day to assess the situation with the US real estate after the release of Building Permits and Housing Starts at 12:30 GMT.

Looking at the GBP/USD pair on a 4HTF for today’s analysis, we can see that there is a downtrend. The price has been flat since early August, and both the price and the 9-EMA have just bumped into our local trend line down, while remaining below the 20-EMA.

With the ongoing global tensions and uncertainty, we have to consider two possible scenarios. The breakout of the local trend line and the 20-EMA up will give us targets around the Fibonacci levels: 1.21334 (23.6%), 1.22069 (38.2%), and then 1.22662 (50%). In case the price moves down further, there is an area of support close to 1.19860 and 1.20170, which the price had tested in January of 2017. The price is also close to the historical low at 1.19048 of October 2016.

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