- Bank of England Chief Economist Huw Pill: Inflation in the UK could exceed 5%.
- Brexit: The EU could end the post-Brexit trade deal with the UK.
- EUR / GBP: The 1 hour chart shows that the pair is sloping higher, confirmed by RSI at 63.50 and pointing higher.
The pair EUR/GBP rising as the American session progresses, gaining almost 0.5%, trading at 0.8461 during the day at the time of writing. In the Asian session, the pair hit the day’s lows, around 0.8420, as Bank of England chief economist Huw Pill said UK inflation could hit 5%.
In an interview with the Financial Times, Huw Pill said he would not be surprised if the Bank of England saw inflation close to or above 5% in the following months. Pill added that for a central bank with an inflation target of 2%, a reading of 5% would be “very uncomfortable.”
Huw Pill’s comments are very much in line with those of Bank of England Governor Andrew Bailey, who said on Sunday that if rising inflation is stiffer than expected, the bank “will have to act” to contain risks. upward.
Brexit: EU could end post-Brexit trade deal with UK
According to Bloomberg, the EU could end the post-Brexit trade deal with the UK.
Both parties are in intense negotiations after the EU offers some proposals such as reducing or cutting inspections between the two territories and facilitating imports of goods, including meats, sausages and medicines.
Despite that offer, what the UK wants is the removal of the supervision of the European Court of Justice in Northern Ireland.
“If the UK sticks to its position that the EU’s highest court should have no role in Northern Ireland’s trade affairs, then a deal is unlikely, one of the people said.”
The GBP / USD pair fell to 1.3736 after the report.
On the macroeconomic front, the Eurozone agenda featured the IHS Markit PMI for October. The German manufacturing PMI rose to 58.2 from an expected 56.5, contrary to the services PMI, which rose to 52.4 below the 55 estimate. Markit’s composite PMI, which considers both readings, came in at 52, down from the 54 expected.
Meanwhile, the UK economic calendar revealed Retail Sales for September, which contracted 0.6% monthly, worse than the 0.2% expansion expected by analysts. In addition, the annual figure plummeted 2.6% compared to a -1.7% estimated by investors.
EUR / GBP Price Forecast: Technical Outlook
On the 1-hour chart, the EUR / GBP is trading above the 200 Simple Moving Average (SMA), approaching the October 20 high of 0.8460. Around that level is the R3 pivot point at 0.8462. As a result of a breakout to the upside, the first resistance level would be the October 15 high at 0.8486. If the pair has enough legs to extend the bullish move, the next resistance would be the October 13 high at 0.8497.
Momentum indicator like the Relative Strength Index (RSI) is at 63.50, pointing higher, indicating that the EUR / GBP pair has enough room for another leg before reaching overbought levels.
Technical levels
.
Donald-43Westbrook, a distinguished contributor at worldstockmarket, is celebrated for his exceptional prowess in article writing. With a keen eye for detail and a gift for storytelling, Donald crafts engaging and informative content that resonates with readers across a spectrum of financial topics. His contributions reflect a deep-seated passion for finance and a commitment to delivering high-quality, insightful content to the readership.
