Global macro overview for 12/04/2016:
The UK inflation data in the form of CPI and PPI indices is scheduled for release at 08:30 GMT today. Market participants do not expect any improvement in this area of the economy as the expected number is at the same level as a month ago: 0.3%. The PPI input, however, is expected to grow substantially from 0.1% m/m (-8.1% y/y) to 2.1% m/m (-6.2% y/y). Inflation in the UK has been well below the target for most of the last two years, with the sharp declines in oil prices being a particular downside impact on prices. Moreover, the core number has been well below the Bank of England's 2% target and even this month is only expected to rise to 1.3%. In conclusion, the BoE is nowhere near its first interest rate hike not only due to low inflation levels, but also the upcoming national referendum on June 25, 2016.
Let's now take a look at the technical picture of the GBP/USD pair on the H4 time frame. After breaking below the golden trend line, the bulls have managed to push the price back up above it again and the market is currently trading just inside of the congestion zone. Neither bulls nor bears are in control of the market as the sideways price action continues. The next resistance is seen at the levels of 1.4287 and 1.4324. The next support is seen at the level of 1.4170.
