14.11.201901:01 Forex Analysis & Reviews: GBPUSD and EURUSD: Weak inflation in the UK is not important for traders. The euro ignores reports on industrial production and consumer prices

The euro ignored inflation data in Germany, as well as the report on industrial production in the eurozone. Low rates once again confirmed the existence of inflation-related problems, even despite all the efforts of the European Central Bank to promote growth. The industrial sector also does not feel well, amid low activity due to trade duties and reduced exports. The British pound managed to maintain its position after a slowdown in annual inflation in October this year.

EURUSD

According to the statistics agency, the final CPI of Germany grew by only 0.1% in October this year, which fully coincided with the forecasts of economists. On an annualized basis, the index increased by only 1.1%, which is quite far from the target level. Germany's harmonized CPI by EU standards also showed an increase of 0.1% in October and only 0.9% year-on-year, which fully coincided with economists ' forecasts.

Weak inflation in Germany allows the European regulator to lower deposit rates even lower than the current negative level, as well as to make negative and the key interest rate, which is now in the zero mark.

As I noted above, eurozone industrial production showed low growth in September this year, however, compared to last year, it seriously fell due to the general slowdown in global economic growth and trade conflicts, which continue due to the actions of the White House administration and their protectionist policies.

According to the statistics agency, the industrial production of the eurozone grew by only 0.1% in September this year compared with August and immediately decreased by 1.7% compared to September 2018. Economists predicted a decline in production by 0.3% and 2.1%, respectively.

As for the current technical picture of the EURUSD pair, it remained unchanged compared to the morning forecast. Bears are clearly waiting for the update of the lows in the areas of 1.0990 and 1.0960, which will increase pressure on risky assets and maintain the current downward trend, which has been observed since November 4 this year. Much will depend on today's US consumer price index data. A strong report will put pressure on the trading instrument, however, if the bulls manage to regain the resistance of 1.1030, the situation may dramatically change, which will lead to an upward correction of risky assets in the area of 1.1055 and 1.1090.

GBPUSD

I have repeatedly noted that major players are focused on the upcoming general election in the UK, and macroeconomic statistics, not very different from forecasts, will not have a major impact on the market. This happened today after the release of the report, which indicated that inflation in the UK continues to fall below the target level of the Bank of England.

According to the National Bureau of Statistics, the annual rate of inflation of consumer prices in the UK slowed down in October, which is directly related to the fall in energy prices. So, consumer prices on an annualized basis increased by only 1.5% in October this year compared with October last year after rising by 1.7% in September. Compared with September of this year, in October inflation fell by 0.2% at all, while the forecast was a drop of 0.1%. The report indicated that the slowdown in overall price increases was due to a decrease in regulated energy prices.

The basic consumer price index, which does not take into account volatile categories, including the price of energy, rose by 0.1% and 1.7%, respectively in October.

As I noted above, now all attention is tied to the publication of opinion polls. According to recent polls, the separation of Conservatives from the opposition Labour Party is quite substantial. Most conservatives in Parliament will allow current British Prime Minister Boris Johnson to break the legislative impasse and pull Britain out of the EU by the agreement reached at the end of this summer.

As for the technical picture of the GBPUSD pair, a break of the support level of 1.2820 will increase pressure on the pound and push it into the region of this month's lows in the areas of 1.2800 and 1.2770. It will be possible to talk about the continuation of the upward correction only after the trading instrument consolidates above the resistance of 1.2870, which will open real prospects for updating the highs of 1.2900 and 1.2940.