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GBP/USD – Can It Rally?
While the action in the currency market has been fierce over the past few weeks, cable had been uncharacteristically quiet hovering between 1.5500-1.5600 and acting almost as an afterthought to EUR/GBP flows. However, tomorrow’s release of BOE minutes could quickly change that and shake the unit from its slumber.
Over the past few weeks UK monetary officials have been surprisingly hawkish stating that UK rates will need to rise sooner rather than later. Their tone has been so direct that some traders now feel that the BoE not the Fed my be the first to move on rates this year.
The market is expecting a 0-0-9 vote but there is strong chance that some MPC members may have changed their mind and if the vote count shows any tilt towards tightening cable could quickly put on 100 points as traders begin to the notion of “UK First” much more seriously.
Technically the pair has support at the 1.5400-5500 level and the upside targets the recent swing highs at 1.5900.