After correcting a little after a sharp rally that
was cause by better than expected UK CPI data. It is obvious that expectations
are high and unless proven otherwise we will probably see Pound rising versus US
dollar in the meantime.
However, two pieces of information that can rock the
boat are coming today from US. US CPI (Consumer Price Index) and FED minutes
are to be released during US session.
CPI is coming at 12:30 GMT and FED minutes at 18:00
GMT. These two may completely turn things around. Better than expected US CPI
and bullish hawkish FED minutes will be taken as a sign that FED will start
raising interest rates sooner than BOE. On the other hand, worse than expected
data and dovish tone inside FED minutes will re-confirm that BOE is ahead of
FED and US dollar will go down against British Pound.
Pound is rising at the time of writing. If it turns
around, there is plenty of support below. The first level is right at early
European session lows: 1.5662. Key support is yesterday’s low at: 1.5644.
I tend to think that the second level is not
reached. On the other hand, resistance is right ahead at yesterday’s high:
1.5717.
Let’s wait and see what happens when US markets open
and fundamental releases come out.
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