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Bank of Englands Bailey: We shouldn’t pre-commit what we’re going to do


Bank of England’s Bailey speaks at an event in London. Questions are expected

  • The basic fundamentals of the inflation profile showing a sharp drop in inflation in 2023 remain in place
  • A range of things are on the table for the August MPC meeting
  • We don’t have to pre-commit what we’re going to do
  • The UK faces a very big real income shock
  • The Bank of England needs to assess how much a real income shock will reduce inflation itself
  • We expect inflation to return to target in about 2 years, all things being equal

The GBPUSD

GBP/USD

The GBP/USD is the currency pair comprising the currency of the United Kingdom, the British pound sterling (symbol £, code GBP) and the dollar of the United States of America (symbol $, code USD). The pair rate indicates how many US dollars are needed to buy one British pound. For example, when GBP/USD is trading at 1.5000, it means that 1 pound equals 1.5 dollars. GBP/USD is the fourth most traded currency pair in the forex market, giving it abundant liquidity and a low spread. While currency pair spreads vary from broker to broker, generally speaking, GBP/USD often stays within the 1 pip to 3 pip spread range, making it a good candidate for scalping. GBP/USD, also known as the “cable” (due to the transatlantic cables used to telegraph its exchange rate in the 19th century) has a positive correlation with EUR/USD and a negative correlation with EUR/USD. ‘USD/CHF. Trading GBP/USD While many traders and even brokers will argue that the best time to trade GBP/USD is during its busiest hours in London and New York, this can be a double edged sword due to the unpredictability of the couple. Its volatility also fluctuates often, and so what might be a profitable strategy one month, may not be so productive the following months. Additionally, purely technical traders can really struggle to be consistent with this pair (i.e. ignoring the fundamentals), due to the unique political nature of the UK. The recent drama surrounding Brexit has added another layer of uncertainty to this currency pair. With a soft resolution not expected in the foreseeable future, it is clear that GBP/USD will be influenced by any development and trading with the European Union.

The GBP/USD is the currency pair comprising the currency of the United Kingdom, the British pound sterling (symbol £, code GBP) and the dollar of the United States of America (symbol $, code USD). The pair rate indicates how many US dollars are needed to buy one British pound. For example, when GBP/USD is trading at 1.5000, it means that 1 pound equals 1.5 dollars. GBP/USD is the fourth most traded currency pair in the forex market, giving it abundant liquidity and a low spread. While currency pair spreads vary from broker to broker, generally speaking, GBP/USD often stays within the 1 pip to 3 pip spread range, making it a good candidate for scalping. GBP/USD, also known as the “cable” (due to the transatlantic cables used to telegraph its exchange rate in the 19th century) has a positive correlation with EUR/USD and a negative correlation with EUR/USD. ‘USD/CHF. Trading GBP/USD While many traders and even brokers will argue that the best time to trade GBP/USD is during its busiest hours in London and New York, this can be a double edged sword due to the unpredictability of the couple. Its volatility also fluctuates often, and so what might be a profitable strategy one month, may not be as productive the following months. Additionally, purely technical traders can really struggle to be consistent with this pair (i.e. ignoring the fundamentals), due to the unique political nature of the UK. The recent drama surrounding Brexit has added another layer of uncertainty to this currency pair. With a soft resolution not expected in the foreseeable future, it is clear that GBP/USD will be influenced by any development and trading with the European Union.
Read this term traded at a New Year’s low early in the North American session, clearing last week’s low at 1.1875, but could not sustain the bearish momentum (the low a reached a new year low at 1.18657).

The ensuing bull run took the price back above the July 5th low at 1.1898. The high price reached 1.1906 but is currently down to 1.1891.

Drilling on the 5 minute chart below, the corrective move from the low reached a 38.2% retracement of the latest downtrend leg today (from the last corrective high that tested the average moving 100 bars on the 5-minute chart). This retracement level comes in at 1.19054. It would need to break back above this level to give buyers more confidence that there should be more upside momentum during a correction. The falling 100-bar moving average (blue line) currently at 1.1924 would be a key target to reach and break through, to add to that near-term upside corrective confidence. Without it, and sellers are still in control.

GBPUSD Corrected Only Modestly


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