Risk appetite in the markets improved after strong increases on Wall Street on Tuesday. The SP500 rose on Tuesday by 2.15%, which was the best day since April and a sign of ending the correction. A manifestation of sentiment improvement helps continue growth in Asia. Japanese Nikkei225 grows 1.1% and Chinese Shanghai Composite gains 0.2%.

The currency market is calm with minor changes. EUR / USD moves back to 1.1550, realizing fluctuations in consolidation. USD / JPY is trying to take advantage of increases on the stock exchanges and exits over 112.20.

Information about Brexit before the EU summit that is starting today gives rise to hopes. Diplomats, among others from France and Germany, they pointed out that negotiations are advanced, and an agreement on the Irish border is possible in the coming weeks, but not before the summit. GBP seems to be waiting for concretes and GBP / USD drifts at 1.3170.

On Wednesday, the 17th of October, the event calendar is busy with important data releases. The event of the day is the FOMC Meeting Minutes release, but during the London session, the UK will post Consumer Price Index data, the Eurozone will present CPI data as well. Moreover, during the US session, Canada will post Manufacturing Shipments data and the US itself will present Building Permits, Housing Starts and Crude Oil Inventories data. There are some speeches scheduled for today from BOE Deputy Governor for Financial Stability Jon Cunliffe, FOMC Member Lael Brainard ECB's Jens Weidmann and BOE Deputy Governor for Monetary Policy Ben Broadbent.

GBP/USD analysis for 17/10/2018:

The Consumer Price Index (CPI) data are scheduled for release at 09:30 am GMT and the market participants expect the CPI to decrease from 0.7% to 0.3% on the monthly basis. The similar reading is expected on the yearly basis, where another decrease is expected, this time from 2.7% to 2.6%.

The Consumer Price Index measures the change in the price of goods and services from the perspective of the consumer. It is a key way to measure changes in purchasing trends and inflation. A higher than expected reading should be taken as positive/bullish for the GBP, while a lower than expected reading should be taken as negative/bearish for the GBP.

Let's now take a look at the GBP/USD technical picture at the H4 time frame. The market tried to rally above the technical resistance zone between the levels of 1.3244 - 1.3257, but failed to reach there and started to slowly decrease. Currently, the price is trading slowly in the middle of the range, around the level of 1.3170 as the market participants await the CPI data. A better than expected data will likely push the prices higher towards the mentioned technical resistance zone and might even break it. On the other hand, the worse than expected data will likely trigger the down move towards the technical support at 1.3132, 1.3125 and 1.3107.