GBPUSD started last week with a rally from 1.5414 up to 1.5500. Then it declined by 266pts and recovered a little, thus closing the week at 1.5322.
The Bank of England left its interest rate and asset purchases unchanged. However, the UK’s central bank will expand the QE program through printing more pounds, which may inevitably lead to devaluation.
This is the news calendar for the rest of the week:
Jan 17th (GMT)
09:30 GBP CPI y/y
09:45 GBP BOE Gov King Speaks
Jan 18th (GMT)
09:30 GBP Сlaimant Count Сhange
13:30 USD РPI
14:00 USD TIC Long-Term Рurchases
Jan 19th (GMT)
13:30 USD Building Permits
13:30 USD Core CPI
13:30 USD Unemployment Claims
15:00 USD Рhilly Fed Manufacturing Index
Jan 20th (GMT)
09:30 GBP Retail Sales
15:00 USD Еxisting Нome Sales
The UK news block:
CPI y/y. This is the key inflation indicator. So, traders should pay attention to it. January’s forecast hints at lower inflation (4.2% vs 4.8% in Dec).
BOE Gov King Speaks. The market is often volatile during such speeches as traders try to find hints at the central bank’s future monetary policy. This time the key interest rate is unlikely to be increased.
Сlaimant Count Сhange. The indicator has been declining for 4 months in a row. This time the amount of jobless claims is expected to grow. If there is a gap between the forecast and the actual data, GBPUSD may well grow volatile. The UK level of unemployment is still 8.3%, which is a negative factor for the vulnerable British economy.
Retail Sales. The indicator entered the negative zone in December. Any growth will be a positive sign for the British economy.
The US news block:
РPI. It is an inflation indicator. As opposed to December 2011, this time it is expected to decline by 0.1%.
TIC Long-Term Рurchases. A considerable increase is expected, which is definitely a positive factor for the US Dollar.
Building Permits. No changes are expected. But, if any, the market will turn volatile.
Core CPI. This is the main inflation indicator. Together with PPI, it reflects the economic situation in the country. The forecast suggests a 0.1% increase.
Unemployment Claims. It is expected to decline by 10K.
Рhilly Fed Manufacturing Index. It has been in the green zone for 4 months in a row. In January the index will probably gain 11.3 points.
Еxisting Нome Sales. The forecast suggests an increase up to 4.65M.
The closest option levels of resistance are 1.5388 and 1.5474.
The closest option levels of support are 1.5297, 1.5160.
Provided by the Department of Options,
