We are watching GBPUSD (bullish), GBPNZD (bullish) and EURGBP (neutral)

Upcoming data:

  • Tue, Sep 12 CPI

Consumer price inflation is likely to move higher once again.

Barclays: August CPIH inflation (Tuesday) is likely to remain unchanged at 2.6% y/y (consensus: 2.7% y/y; previous: 2.6% y/y)

  • Thu, Sep 14 BoE rate announcement (12.00BST)

The MPC’s decisions on interest rates are announced on Thursday (Sep 14) at 12 noon.

Preview: We expect the Bank of England to leave monetary policy unchanged at 0.25%.

At its meeting ending on 2 August 2017, the MPC voted by a majority of 6-2 to maintain Bank Rate at 0.25%. But in June meeting (14 June 2017), the MPC voted by a majority of 5-3 to maintain Bank Rate at 0.25%.

According to Brian Hilliard at Societe Generale, “Market speculation of rate increases has receded. The committee will move back to full strength with the arrival of Sir David Ramsden as the new Deputy Governor, Markets and Banking. We expect him to vote for unchanged policy, taking the vote to 7-2”.

Barclays: We expect the Bank of England to keep its policy settings unchanged this week (Thursday) while seeking to support the currency with more hawkish rhetoric.

TECHNICAL VIEW

We have previously advised buying at 1.7940 levels a week ago. From our buying level, it has moved 300 pips till date. We still believe the upside risk remains in the medium term perspective. Last week’s retracement re-tested the earlier breakout, will aim at 1.85/1.86 levels. Until the cross holds the 1.7650 bullish view remains.

Supports moved to 1.8100, 1.8000 and 1.7900.

 

It is important to always keep in mind the risks involved in trading with leveraged instruments.

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