The British pound experienced a bearish close for the day, forming a black candlestick pattern. This pessimistic sentiment is attributed to the anticipation of the UK’s inflation data for September. The price of the pound pierced the embedded price channel support line, adding to the negative outlook.
1. Inflation Expectations:
– The core Consumer Price Index (CPI) is projected to decline from 6.2% Year-on-Year (YoY) to 6.0% YoY.
– The CPI is also expected to decrease from 6.7% YoY to 6.5% YoY.
2. Potential Breakout:
– If the aforementioned forecasts are realized, it could trigger a breakout towards 1.2070.
– Breaching this nearest support level might propel the price further into a bearish trend, with a target around 1.1900.
3. Positive Scenario:
– A positive scenario would be confirmed if the price surpasses yesterday’s high at 1.2215.
– The nearest bullish target in this case would be the level of 1.2307.
4. Marlin Oscillator:
– The Marlin oscillator, which measures momentum, is currently in the positive territory.
– This favors the main scenario of an upward movement in the pound’s price.
5. 4-hour Chart Analysis:
– On the 4-hour chart, the pound has not yet managed to surpass the resistance indicator lines.
– The Marlin oscillator in this timeframe indicates a downtrend, suggesting a bearish outlook.
– It is evident that the pound is predominantly moving within a range, as it awaits the release of the inflation data.
6. Break Above MACD and Balance Line:
– Notably, the break above the Moving Average Convergence Divergence (MACD) line and the balance line coincides with the price breaching yesterday’s high.
– This development adds significance to the potential positive scenario but further developments are awaited.
In summary, the British pound closed the day with a bearish tone, as market participants awaited the release of the UK’s inflation data. The forecasts for a drop in core CPI and CPI figures could potentially lead to a breakout towards lower support levels. However, a positive scenario could unfold if the price surpasses yesterday’s high. The Marlin oscillator and the 4-hour chart analysis provide additional insights into the current market conditions.