Trade view /
13 September 2016 at 2:21 GMT
An indication of how the fall in sterling
post-Brexit is flowing through into domestic prices is that the Bank of England has already brought forward its forecast date for achieving the 2% inflation target, and a good number today may get the market thinking a further revision will be hinted at in the minutes of the BOE meeting on Thursday.
Wednesday’s labour market update, and retail sales the next day, could also be market-moving. Meanwhile, yesterday’s speech by FOMC
voter Lael Brainard suggested she for one won’t be voting in favour of a rate hike next week, and the odds of majority on the committee voting to do so have dropped back under 20%.
Management and risk description
GBPUSD displays a five-week Inverse Head and Shoulders reversal pattern and yesterday completed a successful retest of Neckline support (refer daily chart below).
Support today lies around the 1.3300 level, 1.3270 max, to yield a rally back towards last week’s 1.3445 high en route to Head and Shoulders target of 1.3730. Only a loss of 1.3240 (Neckline support) would frustrate this upside potential.
is seen as a buy today at 1.3300/1.3275.
Stop: 1.3236, initially.
Time horizon: Allow several days at least.
GBPUSD daily chart (click to expand)
GBPUSD weekly chart (click to expand)
Source: ThomsonReuters. Create your own charts with SaxoTrader; click here to learn more
— Edited by Susan McDonald
Non-independent investment research disclaimer applies. Read more