Global macro overview for 13/09/2017

Global macro overview for 13/09/2017:

High expectations for the British Pound ahead of BoE interest rate decision are still being the main theme for all GBP traders. Yesterday, the UK Office for National Statistics revealed that UK CPI was stronger-than-expected and the growth rate was 2.9% in August, up from an increase of 2.6% in the preceding month. The country's consumer prices growth has been the strongest since the decision to quit the European Union as Brexit kept pushing up the living cost in the UK. Higher costs of fuels as well as a strong rise in clothing and footwear prices, contributed most to the growth, as retailers passed cost pressures straight to customers. Today's UK job market data were worse than expected, except the unemployment rate that declined to 42 years low at the level of 4.3%. Nevertheless, the number of individuals who are out of work and who are claiming some sort of unemployment benefit increased 2.8k and average earnings increased only 2.1% instead of expected 2.3%. The absence of wage pressure is taking away the hawkish ammunition in the Bank of England and reducing the chances of a positive tone in tomorrow's BoE message. However, it is doubtful that investors will completely abandon their hopes for tomorrow's decision, so the GBP may be off for a deeper correction.

Let's now take a look at the EUR/GBP technical picture on the H4 time frame. The market is trading below all of the moving averages, but managed to bounce from the important technical support zone between the levels of 0.8982 - 0.9007. The market conditions are now oversold and some kind of a corrective move is expected towards the nearest technical resistance at the level of 0.9050 - 0.9061.

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