GBP/USD Falls Amid Weak UK Inflation Data – 17 October 2024

Facebook
Twitter
LinkedIn
WhatsApp

As we head into Thursday, October 17, 2024, global markets are primed for a session of heightened volatility, driven by critical economic data releases such as GBP/USD falls amid weak UK inflation data. The spotlight remains on the U.S. dollar amid the backdrop of inflation readings and labor market reports. Meanwhile, currency pairs like GBP/USD, EUR/USD, and USD/CAD are experiencing significant fluctuations as traders position themselves ahead of key events, including central bank announcements and retail sales data.

In the currency markets, the GBP/USD pair experienced a sharp decline following weak U.K. inflation data, adding to concerns about the economic outlook. Simultaneously, EUR/USD exhibited notable bearish momentum, reflecting ongoing economic headwinds in the Eurozone. Across the Atlantic, the USD/CAD pair displayed volatility, influenced by fluctuations in crude oil prices and positioning ahead of key Canadian economic releases.

EUR/USD

GBP/USD Falls Amid Weak UK Inflation Data

Technicals in Focus

The EUR/USD pair traded lower throughout the session, closing around the 1.0856 level. The bearish momentum in the pair was driven by weak Eurozone inflation data and mixed sentiment regarding the U.S. economy. Technical indicators reflect the bearish bias, with the MACD signaling increasing negative momentum and the Stochastic Oscillator entering oversold territory, suggesting a potential bounce may be in sight. However, the 14-day RSI remains neutral, showing no clear directional bias.

Trading Strategy: Neutral to Sell

  • Sell below 1.0870 with targets at 1.0830-1.0810 and stops above 1.0900.
  • Buy above 1.0910 with targets at 1.0935-1.0950, with stops below 1.0880.

GBP/USD

GBP/USD Falls Amid Weak UK Inflation Data

GBP/USD Falls Amid Weak UK Inflation Data

The GBP/USD pair plummeted, breaking below the 1.3000 level after disappointing U.K. CPI data showed inflation remained weaker than expected. The MACD is pointing downward, indicating strong bearish momentum. The Stochastic Oscillator has entered oversold territory, suggesting the possibility of a near-term corrective bounce. However, the 14-day RSI remains subdued, signaling limited buying interest in the short term.

Trading Strategy: Neutral to Sell

  • Sell below 1.3000 with targets at 1.2950-1.2900 and a stop loss above 1.3040.
  • Buy above 1.3040 with targets at 1.3080-1.3100, with stops below 1.3000.

USD/CAD

GBP/USD Falls Amid Weak UK Inflation Data

Technicals in Focus

The USD/CAD pair showed significant volatility, closing near the 1.3760 level. A spike in oil prices buoyed the Canadian dollar temporarily, but the pair retraced its losses as the U.S. dollar regained strength. The MACD is hovering around the zero line, reflecting market indecision, while the Stochastic Oscillator remains neutral. The 14-day RSI is also in neutral territory, suggesting range-bound price action could persist in the near term.

Trading Strategy: Neutral to Buy

  • Buy above 1.3770 with targets at 1.3800-1.3825 and a stop loss below 1.3730.
  • Sell below 1.3730 with targets at 1.3700-1.3680, with stops above 1.3770.

Market Outlook

Looking ahead, traders will focus on several critical data points and events. U.S. core retail sales and jobless claims are expected to provide insights into the health of the U.S. economy, likely impacting the dollar’s direction. Additionally, the ECB press conference and President Lagarde’s comments could further shape expectations about the Eurozone’s monetary policy outlook.

In Canada, the performance of crude oil prices and retail sales figures will remain key drivers for the USD/CAD pair. The pound, meanwhile, may continue to face pressure unless inflation expectations improve. The market remains on edge, with potential for sharp movements as traders react to new economic data and shifting sentiment.

Expect further volatility across major currency pairs as participants digest upcoming reports and central bank communications.

Get New Alerts

Receive exclusive insights and updates directly to your inbox. Be prepared for every turn.