Last time I've been spoken about Cable we where trading near 1.6260 support level and an important pivotal point and and that moment I was making the point that cable should rally from those levels back up, and it did, but you may be asking yourself what's next with cable? You can check out my blog post here: Clash of the Titans - BOE vs ECB


  • Figure 1 GBP/USD Daily Chart. (posted this chart last week)
UK economy continue to recover in January and as per market expectation UK is set to have the fastest growth rate among developed countries. The only notable event for this week is the Inflation report. Currently the inflation rate is down to almost 2% which is in line with BOE's target. According to BOE's forward guidance interest rates will raise only if unemployment rate falls below 7%.

At today's Inflation report there are 2 scenarios:
  1. Bullish GBP: BOE point towards rate hike as soon as the next year,change in the CB's forward guidance.
  2. Bearish GBP: If BOE sounds too dovish and BoE median forecast for CPI is at 2%

  • Figure 2. GBP/USD Daily chart.
In Figure 2 we can see that we're at minor flip zone from where price can go either way in the short term. We can either break and close above the green line or either have a reaction from current level, depending on the Inflation Report and Carney's rhetoric.

Best Regards,
Daytrader21.
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