US inflation cools and UK GDP data is up next
GBP/USD=> The pound rises to 1.17
BTC/USD =>The cryptocurrency holds over 17k
DAX=>The index rises over 14000
GBP/USD looks to GDP data
GBP/USD is steadying over 1.17 after rallying 2.9% in the previous session. The pair soared after US inflation came in cooler than expected, raising expectations that the Federal Reserve could slow the pace at which it raises interest rates. Today attention is on UK GDP data, which is expected to show that the UK economy contracted by 0.5% in the July – September period. The BoE warned in the November interest rate meeting that the UK would likely enter recession, two-quarters of contraction, in Q1 2023, lasting across the year, which would help lower inflation. Weak economic growth could pull the pound lower.
Where might the GBP/USD price head to?
GBP/USD found support on the 50 sma and rebounded higher, breaking out of the 5-month falling channel and the 100 sma, running into resistance at 1.1730, the September high. This and the RSI rising above 50 could support the view that there is more upside to be had? A rise of 1.1730 is needed to extend the bullish trend towards 1.1920, the late August high. Meanwhile, should the sellers defend the 100 sma and 1.1730, the price could fall to test 1.1330, the 50 sma.
BTC/USD rises from the brink
Volatility is back in the crypto space with a bang. After falling to a two-year low on Wednesday as Binance walked away from the emergency FTX deal, cryptocurrencies recovered yesterday, bouncing back by over 10%, supported by the upbeat macros backdrop. Weaker than expected US inflation and core inflation, which dropped to 7.7% from 8.2% and 6.3% from a 40-year high of 6.6%, respectively, sent the USD over 2.5% lower and risk assets soaring. The Nasdaq closed over 7% higher. Investors are pricing in an increased likelihood that the Fed will hike rates by 50 basis points in December, rather than 75 basis points, and could maintain the slower pace should inflation keep falling. Today the pair is easing lower but holds over 17k. Michigan consumer confidence data is due. Investors will also watch closely for developments surrounding FTX, which could weigh on sentiment.
DAX rises to 5-month high
The DAX is rising, adding to gains in the previous session following the US inflation data. The DAX pushed over the 200 sma reaching a 5-month high of 142250. Attention now turns to German inflation data, which is expected to confirm a record high as energy prices soared following a surge in energy prices as gas imports from Russia slowed significantly. Hot inflation could mount pressure on the ECB to hike rates aggressively again in the coming meeting, potentially by 75 basis points for a third meeting. While the German economy avoided a contraction in Q3, elevated inflation and rising interest rates are expected to tip the economy into contraction in the final quarter.
Support can be found at 14000 (round number) and 13570 (September high)
Resistance for the pair can be seen at 14700 (June high) and 15000 (March high).
