Global macro overview for 18/10/2016:
The inflation data from the United Kingdom has been released this morning and it surprised market participants. The Consumer Price Index (CPI) was released at the level of 0.2% (0.2% expected and 0.3% prior) and the Core CPI ticked higher to the level of 1.5% from 1.3% a month ago, beating the estimates of 1.4% for the reporting month. The main drivers for inflation to increase were gas prices, motor fuels, and hotels. In conclusion, a slight improvement in inflation is still way below the BoE 2.0% initial target for the year, so the there is not justification to change the current monetary policy yet.
Let's now take a look at the EUR/GBP technical picture in the daily time frame. The market is still trading above all of the moving averages since the higher high has been established at the level of 0.9268. Bulls are in full control over this market and only a sustained break out below the golden trend line support would change the outlook to bearish.
