Top Forex Trade Setups and Economic Events, Jan 16 - UK Inflation Under the Spotlight - Forex News by FX Leaders
Lat me explain again that we need a Brexit deal

Top Forex Trade Setups and Economic Events, Jan 16 – UK Inflation Under the Spotlight

Posted Wednesday, January 16, 2019 by
Arslan Butt • 2 min read
  • The Great Britain Pound slipped from two-month highs against the buck on Tuesday.
  • British lawmakers beat Prime Minister Theresa May’s deal on withdrawing from the European Union.
  • Sterling remains in focus on the back of BOE Gov Carney’s speech and CPI y/y figure for the year 2018.

Good Morning, fellas.
A day prior, the British Pound sank from two-month highs against the Greenback as the level of volatility soared after the Brexit voting results. Parliament gave the thumbs-down to Prime Minister Theresa May’s Brexit deal later in the day.

British lawmakers beat Prime Minister Theresa May’s agreement on withdrawing from the European Union. That’s the first British parliamentary defeat of a deal since 1864 which raises a question mark on the two-year strategy of producing an amenable separation with EU while maintaining close ties with the Eurozone after the March 29 exit.

Anyway, as per the Sky Deputy Political Editor, up to 100 labor MPs will rotate towards a second referendum this morning. That’s also making stock markets bullish in the hope that Britain will go for no-Brexit this time.

GBP/USD – Pair Hits Target & Reverses Back

The cable dipped more than 150 pips to place a low at $1.2667, and took a bullish turn right after the that. It has formed a doji candle on the daily timeframe, which is signaling indecision among bulls and bears.

Here, the doji candle has two meanings. Either bulls are exhausted and sellers are looming around $1.2880 or the buyers are taking a breath before placing more bets on the GBP/USD.

GBP – Consumer Price Index
The Office for National Statistics is scheduled to release the inflation data at 9:30 (GMT). The CPI shows a change in the price of goods and services purchased by consumers.

The Bank of England boosted rates in August after inflation had picked up. However, the prices are still not moving anywhere as economists have forecast the inflation rate of 2.1% which is below the 2.3% rate in November. Traders will be factoring in a weaker inflation forecast, therefore, Sterling is likely to remain under selling pressure.

Support Resistance
1.2716 1.2963
1.2569 1.3063
1.2322 1.3311
Key Trading Level: 1.2816

What’s in it for us?

We have an opportunity to capture a quick sell below $1.2895 with a target of $1.2820. On the flip side, buying is preferred above $1.2810 today.

Good luck and stay tuned for latest updates.

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About the author

Arslan Butt // Index & Commodity Analyst
Arslan Butt is our Lead Commodities and Indices Analyst. Arslan is a professional market analyst and day trader. He holds an MBA in Behavioral Finance and is working towards his Ph.D. Before joining FX Leaders Arslan served as a senior analyst in a major brokerage firm. Arslan is also an experienced instructor and public speaker.
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