Global macro overview for 16/11/2016:
The Consumer Price Index data published yesterday disappointed market participants. Despite the steep fall in the value of the British Pound after the Brexit vote, the inflation has not gained momentum as the monthly CPI declined again to the level of 0.1% (0.9% y/y), while market participants expected a slight increase to 0.3% (1.1% y/y) after a 0.2% figure from September. The core CPI decreased below expectations as well, revealing only a 1.2% increase on a yearly basis (1.4% expected; 1.5% prior). The Office for National Statistics said factory gate prices increased 2.1%, faster than expected and the largest increase since April 2012. Moreover, the Producer Price Index (PPI) jumped 4.6% on a monthly basis in the reported month, after rising just 0.1% in the previous month, whereas economists penciled in an increase of 1.6%.In conclusion, all major indicators are pointing out worse than expected readings of inflation, but BoE is still expecting the inflation to rise to 2.7% by this time next year.
Let's now take a look at the EUR/GBP technical picture at the daily time frame. The bears have managed to break out below the golden trend line support and now the three important technical support level are all violated as well. The price is trading just at the 100 DMA support, but so far it does not look like the bulls want to take control over again. The next support is seen at the level of 0.8340.
