TRADING TIPS :
- Forex-Dollar strengthens broadly vs. rivals in risk-off trade.
- Forex-Dollar recovers from Fed disappointment, regains ground vs. yen, euro.
- Forex-GBP/USD extends losses on weak U.K. inflation report.
GBP/USD hit 1.5978 during European morning trade, the pair’s lowest since October 6; the pair subsequently consolidated at 1.5973, retreating 0.69%. Cable was likely to find support at 1.5941, the low of October 6 and an 11- month low resistance at 1.6128, Monday’s high. In a report, the U.K. Office for National Statistics said the rate of consumer price inflation slowed to 1.2% last month from 1.5% in August. Analysts had expected U.K. CPI to fall to 1.4% in September.Month-over-month, consumer price inflation was flat in September, after rising 0.4% in August. Core CPI, which excludes food, energy, alcohol, and tobacco costs rose at a rate of 1.5% last month, down from 1.9% in August. Analysts had expected core prices to rise 1.8% in September.
USD/JPY added 0.21% to trade at 107.09, easing off a one-month low hit overnight.The safe-haven yen had strengthened recently after the International Monetary Fund cut its forecasts for global growth in 2014 and 2015 last week and warned that global growth may never reach its pre-crisis levels ever again.Markets were also jittery amid the widening Ebola epidemic. The ZEW Centre for Economic Research said that its index of German economic sentiment fell by 10.5 points to minus 3.6 this month from September’s reading of 6.9. Analysts had expected the index to decline by 5.9 points to 1.0 in October.The index of euro zone economic sentiment plunged to 4.1 in September from 14.2 in August, below expectations for a decline to 7.1.
1. Buy GBP/USD Above 1.5945-TG:1.5965/1.5995 SL 1.5915
2. Sell GBP/USD Below 1.5895-TG:1.5875/1.5845 SL 1.5925