In the morning, there was data that limited the upward potential in the British pound, recruited after yesterday's news on Brexit. This is a report on the growth of the UK economy, which, in quarterly terms, although it showed an increase, however, compared with the previous month, the growth was zero.
UK economy
The growth of the economy was due to an increase in retail sales and housing.
According to the National Bureau of Statistics ONS UK, GDP from June to August of this year grew by 0.7% compared with the previous 3-month period. Compared to the same period of 2017, the growth was 2.8%.
As I said above, in August of this year, compared with July, the growth was zero, which may adversely affect the final annual indicator. As noted in the ONS, the maximum increase in GDP was provided by good retail sales, as well as housing construction in the summer months.
Also today, a report was published from ONS, in which it was stated that the negative trade balance of Great Britain in August of this year increased to 11.2 billion pounds from 10.4 billion pounds in July, while from June to August, there was a decrease in the negative trade balance.
Industrial production in the UK showed more modest growth in August than in July of this year.
According to the data, production increased by 0.2%, while compared to the same period in 2017, the growth was 1.3%. Manufacturing output fell by 0.2%. Fall is observed for the second month in a row. Only the production in the mining and oil and gas industry distinguished, which grew by 0.2%.
From June to August compared with the previous three months, industrial production increased by 0.7%.
As for the technical picture of GBP / USD, it remained unchanged compared with my morning forecast. The upward potential is still limited by resistance around 1.3175. Only a breakthrough in this area will open the way to new weekly highs and lead to a resistance test of 1.3270 and 1.3350.
US Inflation
Data on producer price index in the United States led to the fall of the US dollar, as they completely coincided with the forecasts of economists and did not please the traders. On the other hand, maintaining inflation at acceptable levels will help the Federal Reserve System to more systematically approach the increase in interest rates in the future without fear of a sharp inflation jump.
According to a report by the US Department of Labor, PPI producer price index rose by 0.2% in September compared with the previous month. Economists also expected the index to increase by 0.2% in September.
As for core inflation, excluding volatile categories of food and energy, prices in September rose by the same 0.2% compared with the previous month, which also coincided with economists' forecast. Compared to the same period last year, inflation rose by 2.6%.
As for the technical picture of the EUR / USD pair, the current growth potential is limited by the resistance around 1.1540, the breakthrough of which will lead to the formation of a larger upward wave. The main support now is the level of 1.1480, a breakthrough of which can seriously affect further corrective prospects for the growth of risky assets.
The material has been provided by InstaForex Company - www.instaforex.com