Yikes, the U.K. economy just reported record-high inflation data!
What could this mean for BOE policy and sterling price action?
Before moving on, ICYMI, yesterday’s watchlist checked out a potential upside breakout on EUR/CHF. Be sure to check out if it’s still a valid play!
And now for the headlines that rocked the markets in the last trading sessions:
Fresh Market Headlines & Economic Data:
U.S. Empire State manufacturing index up from -9.1 to +4.5 in NovU.S. Oct headline producer prices up 0.2% m/m vs. 0.4% forecast
U.S. core PPI stayed flat in Oct vs. projected 0.3% monthly uptick
New Zealand dairy prices rebounded 2.4% in latest GDT auction
Australia’s MI leading index down by another 0.1% m/m in Oct
Japanese core machinery orders slumped 4.6% m/m in Sept
Japanese Sept tertiary industry activity dipped 0.4% m/m vs. projected 0.6% uptick
Australian wage price index up 1.0% q/q in Q3, following earlier 0.8% increase
Asian shares, risk appetite rattled by Poland blast
G20 leaders reaffirm exchange rate commitment from April 2021
U.K. headline CPI jumped from 10.1% to 11.1% y/y in Oct vs. 10.7% forecast
U.K. core CPI held steady at 6.5% y/y vs. estimated dip to 6.4% in Oct
Upcoming Potential Catalysts on the Forex Economic Calendar:
Canadian CPI at 1:30 pm GMT
U.S. retail sales at 1:30 pm GMT
BOE monetary policy report hearings at 2:15 pm GMT
U.S. industrial production data at 2:15 pm GMT
ECB head Lagarde’s speech at 2:15 pm GMT
G20 meetings still ongoing
EIA crude oil inventories at 3:30 pm GMT
New Zealand quarterly PPI at 9:45 pm GMT
Australian employment change at 12:30 am GMT (Nov. 17)
Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️
What to Watch: GBP/AUD
Price action is heating up for pound pairs, as the U.K. CPI report once again beat expectations!The economy printed record-breaking inflation figures, as the headline CPI jumped to 11.1% year-over-year while the core figure held steady at 6.5%.
This might get pound bulls charging once again on hopes that the BOE would accelerate its pace of interest rate hikes.
If that’s the case, GBP/AUD could set its sights back on the top of its descending triangle visible on the hourly chart. Price is currently testing support and could make its way higher to the 1.7650-1.7700 area again.
After all, Stochastic is pointing up from the oversold region to confirm that buyers are ready to get back in the game. Moving averages, on the other hand, still point to the possibility of a bearish breakdown.
If the latter happens, GBP/AUD might be in for a selloff that’s the same height as the chart pattern.
Just keep in mind that risk-off flows might be coming in play now that investors on edge due to the blast in Poland.
Apart from that, don’t forget that Australia has its jobs report coming up in the next Asian session, and analysts are expecting a stronger pickup in hiring for October.
Better check out the average GBP/AUD volatility when setting entries and exits!