TRADING TIPS :
- Forex-Dollar hovers at 12-year highs in risk-off trade, ECJ move hits euro.
- Forex-NZD/USD slips lower in risk-off trade.
- Forex-EUR/USD hits fresh 9-year lows after ECJ ruling.
GBP/USD touched highs of 1.5223 overnight, before pulling back to 1.5168.Sterling remained under pressure after data on Tuesday showed that the annual rate of consumer inflation in the U.K. slowed to 0.5% last month from 1.0% in November.Consumer prices were unchanged from a month earlier, compared to expectations for an uptick of 0.1%.The report said inflation was flat in December due to falling gas and electricity costs. In addition, transport costs fell by 0.2% from a month earlier, due to falling petrol and diesel prices. The slowdown in inflation underlined expectations that the Bank of England will keep interest rates on hold at record lows for most of this year.
EUR/USD hit 1.1727 during European morning trade, the pair’s lowest since November 2005 and was last at 1.1759. The drop in the euro came after the advocate general of the European Court of Justice, Pedro Cruz Villalon, advised judges to approve the ECB’s Outright Monetary Transactions program, a measure which was launched in 2012, with conditions.Also Wednesday, data showed that euro zone industrial production rose 0.2% in November, in line with expectations, but factory output was down 0.4% on a year-over-year basis.Meanwhile, oil was hit after the World Bank cut its forecasts for global growth on Tuesday, adding to fears over the faltering economic recovery. Oil prices continued to tumble on Wednesday after falling to almost six year lows in the previous session, after OPEC said it will not cut output despite a global supply glut.
1. Buy GBP/USD Above 1.5205-TG: 1.5225/1.5255 SL 1.5175
2. Sell GBP/USD Below 1.5140-TG: 1.5120/1.5090 SL 1.5170