There was no economic data of significance on the UK calendar this week, but traders have kept in mind Bank of England hints that a rate hike is coming, sooner rather than later. But in the meantime USD is in the driver's seat of GBPUSD.
With the $258 billion of debt sales out of the way, there's not much data of interest out of the US today. The Fed's semi-annual monetary report to Congress will be released and Federal Open Market Committee member John Williams will speak on the economic outlook.
Management and risk description
Sterling displays a potentially developing one-month Inverse head & shoulders classical charting pattern (see Daily Chart below).
Support now lies at 1.3900/1.3860, and while this holds today, it enables a run at the key resistance level of 1.4080.
A sustained break of this resistance would be required to confirm Sterling’s reversal formation and herald a probable advance toward 1.4435 and then 1.4500 over the coming days or weeks.
Entry: Today, Sterling is seen as a Buy in the low 1.3900s.
Stop: just under 1.3860, initially.
Time horizon: allow up to several weeks.
Daily GBPUSD chart (click to expand).
— Edited by Robert Ryan
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