August 15th
17:00 USD - TIC Long-Term Purchases
August 16th
12:30 GBP - СPI
Tentаtive GBР - BОE Inflation Letter
16:30 USD - Building Реrmits
August 17th
11:30 USD - РРI
12:30 GBP - Claimant Count Change
12:30 GBP - MРC Meeting Minutes
August 18th
12:30 GBP - Retail Sales
16:30 USD - Core CPI
16:30 USD - Unemploуment Сlaims
18:00 USD - Existing Hоme Sales
18:00 USD - Phillу Fed Manufacturing Indеx
August 19th
12:30 GBP - Publiс Seсtor Net Borrоwing
GBPUSD started last trading week with a price gap. It started rallying from 1.6388 and opened at 1.6455 on Sunday after exceeding the option barrier 1.6449 once again. Eventually it reached the week’s high - 1.6470. After making a ‘double top’ (declining and then hitting 1.6471) GBPUSD showed a downswing, breaking the option barriers located at 1.6327 and 1.6232. Later it rebounded from 1.6110, a level of support, ant started rallying. The currency pair closed last trading week slightly above the 50% Fibo level.
The current market situation has been barely determined by fundamentals. However, a 0.4% decline in the UK’s manufacturing production made GBPUSD decline from 1.6377 down to 1.6175 – almost 200 pts. In advance of the Fed Reserve’s interest rate decision GBPUSD started rallying as nobody expected the key interest rate to be raised. In a week the currency pair passed 361pts from 1.6471, the high, down to 1.6110, the low.
The entire world has been seeing political and economic changes since S&P downgraded the USA’s credit rating. The rating agency seems to have a significant impact on investors and traders’ decision-making. However, even after the rating cut the US still remains the world’s leading economy.
The eurozone’s debt problem is not in focus of the media any more due to Jean-Claude Trichet’s “intervention” in the market situation, which helped to make Euro stable. Ben Bernanke also contributed to the stabilization by promising no interest rate increase within the next 2 years. Is the time of instability over? If so then GBPUSD has a chance to decline.
This trading week is rich in major economic reports, including the UK’s GDP and inflation data, which is important for interest rate decisions.
The UK’s Consumer Price Index (CPI) is another major index, which is expected to reach 4.3% (+0.1% in July as opposed to June’s data). The BОE Inflation Letter by Mervyn King, Governor of the BoE, has already become a routine since the inflation rate exceeded the limit. Last week Mervyn King reported that the BoE expects the inflation rate to exceed 5% within a couple of months but in 2012 it will make a sharp decline. This time Mr. King is expected to say that the base of the country’s inflation is weak while the consumer price growth is mostly determined by external factors, which means that in mid-term perspectives the rate of inflation will fall below the limit and will return in the range.
Numerous economists assume that MРC Meeting Minutes may show that one of the MPC members, who have been voting for an interest rate increase - Spencer Dale and Martin Weale – have probably joined the majority. According to the Department of Options, , if one of them has voted against an increase and the report reveals that, there will be a volatility spike in the market of GBPUSD.
As for the US, the CPI report is one of this week’s major news releases. Analysts say there will be a 0.2% increase. The US housing market won’t probably see any major changes.
The closest significant levels of support and resistance are the option barriers located at 1.6232 and 1.6327.
Provided by the Department of Options,
