Baxia Markets
October 18, 2023

Inflation Surprise: UK's 6.7% Rate Challenges GBPUSD Resistance

market analysis header imageThe UK economy recently reported a higher inflation rate than initially anticipated, coming in at 6.7%, slightly exceeding the 6.6% forecast. Key level resistance for GBPUSD can be found in the range of 1.2180-1.22038, marked within a light blue rectangle. A notable shift towards a more bullish sentiment might be witnessed if the price successfully breaches and closes above this critical resistance level. Additional market developments are expected during the New York trading session, with a focus on US real estate development.


Economists are projecting a cooling effect on building permits while expecting higher figures for issued permits. A better-than-expected outcome in this regard could exert downward pressure on GBPUSD, potentially testing the key support zone at 1.2152-1.2133. Nevertheless, a mixed outcome may favor GBPUSD bulls.Inflation Surprise: UK's 6.7% Rate Challenges GBPUSD Resistance

GBPUSD Technical Overview

From a technical perspective, GBPUSD maintains a bearish bias, as indicated by the slow-moving EMA indicators, with EMA 50 remaining below EMA 200.


Fast-moving indicators such as MACD and Anchored VWAP offer a somewhat mixed signal. The MACD exhibits a nuanced stance with the histogram above the zero line, while the signal line remains negative (below the zero threshold).


The Anchored VWAP, plotted since the Monday open, shows GBPUSD hovering above the first upper band, signifying a bullish sentiment. Notably, it has yet to dip below the first lower band. On the whole, the Anchored VWAP provides a bullish signal.


These mixed signals, set against a bearish backdrop implied by the slow-moving indicators, may find greater clarity and direction during the New York trading session. With additional news releases expected during this New York session, heightened volatility and clearer market insights are anticipated.

Key Economic News to Watch Today

China, GDP QoQ

Actual 1.3% vs Forecast 1.0%

China, GDP YoY

Actual 4.9% vs Forecast 4.4%


Actual 6.7%  vs Previous  6.6%

Euro, CPI

Forecast 4.3%  vs Previous  5.2%

US, Building Permits

Forecast 1.455M vs Previous  1.541M

US, Housing Starts

Forecast 1.380M  vs Previous  1.283M

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