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UK Misses Forecast in Growth

A guest post written by DAR Wong

Currency Market Observations – 26 February 2018

Fundamental Outlook

The US jobless claims improve amid growing existing home sales. Eurozone fulfills expected gains in inflation. U.K. misses the GDP forecast while business investment flattens.

The U.S. existing home sale expanded at 5.38 million after the December was revised down to 5.56 million. Unemployment claims lowered to 222,000 in the week ended 17 February.

German ZEW Economic Sentiment grows 17.8 in February and lower than previous month 20.4. German manufacturing index grows at 60.3 reading in February and matched forecast.

Eurozone consumer prices rose 1.3 percent in January on annual basis. Another report on core prices, excluding food and energy, grew 1.0 percent from a year ago.

The U.K. average earning index gained 2.5 percent in quarterly basis ended December. Claimants for jobless benefits dropped 7,200 in January and better than expectation. Public sector net borrowing slid GBP11.6 billion in January after GBP300 million gains in December.

U.K. GDP for Q4 seasons grew 0.4 percent and below estimate. Another report on prelim business investment was flat in Q4 seasons compared to revised 0.5 percent gains in previous quarter.

Technical Forecast

USD/JPY has been moving as we predicted last week. This week, we forecast the trend will still be contained from 105.00 – 107.50 range without clear direction. Mixed sentiment is expected as traders are watching possible change in Dollar trend.

EUR/USD has been trading from 1.2200 – 1.2550 for past 2 weeks. This week, we reckon the trend will be likewise until the movement extends beyond either direction. Technically, there is no clue for a directional headway since the price pattern is forming a triangle formation in week-chart. Risk is advised upon breakout trend.

GBP/USD traded slightly lower in last week pattern. This week, we foresee the resistance will stay firm at 1.4100 level while market might behave sideways. Breaking below 1.3800 area will initiate a new selling pressure as traders may abandon their long-view upon this violation.

Dar Wong

This post is contributed by OPF Guest Blogger, DAR Wong.

DAR Wong is a registered fund manager in Singapore with 26 years of global trading experiences. You may reach him at dar@pwforex.com

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DISCLAIMER: This post is written for general information only. The author, publisher and/or any third party involved in the distribution of this work assume no legal responsibilities and shall have no liability whatsoever for any direct or consequential losses, costs or expenses arising from the use of the information contained herein.

 





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