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GBP/USD – Back to the Lows?
After failing at the 1.3450 level cable saw a major breakdown today dropping below 1.3200 figure on the back of cooler than expected CPI data as lower exchange rates failed to spark any inflation in the UK economy.
Tomorrow the market get a glimpse at the labor numbers as well as wage data and the day after that the BOE will make it monthly announcement on policy. If the employment numbers miss then the UK central bankers will feel emboldened to ease further, especially with inflation non-existent. That suggests that sterling could decline to 1.3000 over the medium term horizon as rates in UK continue to decline.
Technically the pair has support at 1.3000 and then 1.2800 levels while the upside continues to be contained by the 1.3450 level.