Vlad Demochko
Last week the British Pound failed to avoid the influence of the eurozone debt crisis and started falling down. The British economy showed some growth in Q3 2011 but in October some economic indicators showed weakness.
GBPUSD was unstable and volatile and closed the trading week above 1.60. Monday and Tuesday were the most volatile days of the week. The currency pair started it from the 1.6131 high then suddenly dropped 167 points down, then recovered and gained 34points, thus making another weekly high at 1.6165. Later it lost 276 points. That was a real roller-coaster.
Let’s look at this week’s major economic reports:
Nov 8th (GMT)
09:30 GBP Manufacturing Production
Nov 9th (GMT)
14:30 USD Fed Chairman Bernanke Speaks
Nov 10th (GMT)
12:00 GBP Asset Purchase Facility
12:00 GBP Official Bank Rate
Tentative GBP MPC Rate Statement
13:30 USD Trade Balance
13:30 USD Unemployment Claims
Nov 11th (GMT)
09:30 GBP PPI Input
14:55 USD Prelim UoM Consumer Sentiment
Manufacturing Production: The production level is expected to gain 0.2% despite declining during the last 3 months.
Asset Purchase Facility: October’s expansion of the QE program was made a little earlier than expected, the expansion itself was relatively bigger as well. That was the first change in the BoE’s monetary policy over a long period of time, thus having a considerable impact on the British pound. Therefore, this week Mervyn King and his colleagues are unlikely to make any further considerable changes to the current monetary policy. However, it should be noted that some experts expect the QE program (asset purchases) to go beyond the £275B limit.
PPI: Production prices are volatile. Last month they gained 1.7% after a 1.8% decline a month before. Nevertheless, they give hints for CPI, which is a much more significant indicator and will be published a week later. PPI is expected to gain 0.2%.
The current levels of support are 1.5999, 1.5911 and 200-day MA. The level of resistance is the option barrier 1.6232.
Provided by the Department of Options,
Vlad Demochko
