Forex Marketz Daily Forex News – Fully Markets Update
GBP/USD (1.61859)
The United Kingdom just released its inflation data, CPI, which showed prices for food, goods and services rose 1.5 percent (annually) last month. CPI in July came out at 1.6 percent. Even though we met market expectations, numbers show that inflation in the U.K. for food has now hit a five year low. The Core CPI, without the volatile energy or food, was up by 1.9 percent in August. This is up from 1.8 percent in July and beat expectations.
The technical analysis tells the following story. We see short term support now around 1.6220/1.6219. Even if one elects to go long now, remember we have the Scottish vote for independence just around the corner. This will not be a good thing for the pound, especially if they vote to sever ties and become a separate nation. We see resistance lining up at 1.6321. Being close to a support level now, might not be a good time for short positions either.
Right now there is a ratio, for long and short positions at 1.20. The number of traders who are long is around 54 percent. Volatility will remain high until the vote is concluded. If Scotland becomes independent, a mess can ensue for the Sterling. It’s a wait and see moment.
