Cable Update (GBPUSD)

Nah, you are slowly but surely coming along popsicle.

Also more info can be found in "The Zone Break Out" thread -http://www.forexfactory.com/showthread.php?t=164034

Good luck!

Joe, you should stick to your guns but with the realisation that what does matter is the way the market interprets the data, not what we think!

Did you watch the Price as the 9.30am (bst) candle opened? Lots of people "expecting" the news to be bad for GBP sold hard and price dropped by 20 pips within seconds. However 40 odd minutes later and it seems that the market does not view the news as overly concerning and it looks like we are back in the original morning trend...

...and by that, I mean bouncing between support around the Daily Pivot @ 5635 and resistance near 5700.

Well, those are my figures anyhooo.

Actually it wasn't, stop using the color on FF as an indicator of bearish v bullish news. Lower core is good for Sterling.

Actually that means that the market expects the news to be good, you got that backwards a bit.

Dropped hard and 20 pips, really don't belong in the same sentence.

F**** F******

Anyone planning to short Sterling, just note that there is an inverse head and shoulder pattern formation on 4Hour chart.

Take care and happy trading...

Seems like every time it nears 5700 area it gets rejected back down.....wish another good short would come our way soon....

Thanks Cloggie, i'm in danger of becoming overconfident now.

Signs of deflation if it continues dropping, although BoE still have their 2% target. Also means that interest rate hikes are less likely in the near future. Mervin thinks otherwise -

http://www.bbc.co.uk/news/business-10944522

Fair enough - my hideous interpretation suggests even more reason to watch PA!

Magix vouched for you

The drop in Core CPI is a direct result of money supply and the effect of trade balance on the BOP, a reduction of the core number signifies a reduction in supply even though the trade balance and QE increased the supply, so yes under normal circumstances an increase would be a prelude to an increase in future interest hikes, however interest cannot be raised unless the money supply is taken care of first, a lowering of the core does that for Mervyn. Next report should now see a lowering of the overall CPI and the latent CPI (not directly published)

This interests us as FX traders because price of a currency is directly related to its supply or abundance in the market. Having seen good numbers come out of the trade balance report and GDP growth, we now see a drop in core signifying that the supply is becoming regulated by the growth in economy and is not artificially afffected by the QE.

That's why the core CPI reduction was not bearish.

count the *

it is actually Forex Factory with the rest of the letters in *

I am holding my longs till I see a 4 hour downside pattern

Excellent macroeconomic analysis, thanks

Did you make sure you got paid on reaching the top of the flag?

By Nicholas Winning
Of DOW JONES NEWSWIRES


LONDON (Dow Jones)--U.K. inflation slowed as expected in July, but not by enough to prevent the Bank of England Governor Mervyn King from having to write another explanatory letter to the government about the rate of price growth, official data showed Tuesday.

The annual inflation rate dipped to 3.1% in July from 3.2% in June, the Office for National Statistics said. That's in line with the market consensus estimate from a Dow Jones Newswires survey of economists last week.

On a monthly basis, the consumer price index fell 0.2% in July after a 0.1% rise in June. Economists were expecting a 0.1% drop in July.

Economists said they expect the inflation rate to continue to drop through the rest of this year as the impact of the last increase in sales tax fades, and due to the appreciation of the pound and weaker petrol prices. But a planned increase in value-added tax in early 2011 is expected to lead to another spike in inflation.

"That said, with fiscal austerity set to weigh on activity and medium-term inflation pressures, we continue to doubt that the BOE will look to tighten monetary policy before [the second half of] 2011," James Knightley, an economist at ING NV, said in a note.

The ONS said the main upward pressures to inflation between June and July were from transport, and food and non-alcoholic beverages. The most significant downward contributions came from clothing and footwear prices--which posted their sharpest fall for June to July since 2002--and furniture, household equipment and maintenance.

There are signs that underlying inflationary pressures are easing. Core inflation, which excludes volatile energy, food, alcohol and tobacco prices, slowed to 2.6% on the year in July from 3.1% in June, the lowest level since November last year, the ONS said.

The U.K.'s central bank governor is obliged to write to the Chancellor of the Exchequer once every three months that annual inflation is more than one percentage point above or below the central bank's 2.0% target.

The BOE said last week that it expected inflation to remain above target for all of next year, then fall below target in early 2012 and stay under that level until mid-2013.

Economists expect the bank to maintain its ultra-loose monetary policy for some months to come, but there have been concerns that if the rate of price growth remained stubbornly high it could push up public inflation expectations, resulting in higher consumer prices.

Andrew Sentance, a member of the BOE's interest rate-setting Monetary Policy Committee, voted in June and July to raise interest rates to dampen inflation pressures, although economists don't expect his view to garner much support in the near-term.

Earlier this month the BOE kept its benchmark interest rate at a record low of 0.5%, where it been since March last year, and left its bond-buying program unchanged at GBP200 billion.

The ONS said retail price inflation, an alternative measure of price rises traditionally used as a gauge for wage settlements, dropped 0.2% on the month and rose 4.8% on the year in July.

Economists were expecting a drop of 0.3% on the month and increase of 4.7% on the year. In June, the retail price index increased 0.2% on the month and 5.0% on the year.

ONS Website: www.ons.gov.uk

-By Nicholas Winning, Dow Jones Newswires; +44 207 842 9498; [email protected]

Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/access/al?...stM2ixBg%3D%3D. You can use this link on the day this article is published and the following day.

(END) Dow Jones Newswires

August 17, 2010 05:39 ET (09:39 GMT)

Copyright (c) 2010 Dow Jones & Company, Inc.

I wasn't commenting on your post, I was commenting on the 2nd vouch you got from Magix. He must have a soft spot for you

yeah, he is my brother