Today’s surprising data reading of core inflation in the UK has caused a violent reaction on GBPUSD pair. Inflation rises above forecasts what may mean that rates hike in the UK is getting closer. Currently, the only question is: who will be the first – BoE or Fed? Investors should observe the behavior of this pair and levels visible on the chart below as successful breakout from consolidation in any direction will cause further dynamic movement corresponding with the direction of this break.
Interval: monthly
Chart shows the channel in which Cable moves since 2009 (dashed lines). Additionally, I have marked ranges of individual monthly movements (yellow) which show that monthly fluctuations in GBPUSD are historically very limited.
Interval: daily
The price created a narrow channel since early July, of which only followed the false breaking. It means that investors are moving within the consolidation channel waiting for the border break in any direction. We pointed minimum levels on the chart (red lines) where price may reach after the breakout. Those levels are measured movements and important support / resistance.
Interval: hourly
On August 7th there was an unsuccessful attempt to exit out of the consolidation to the south, and today the situation was similar but in opposite direction. If GBPUSD successfully breaks out of the consolidation, the earlier mentioned upward movement will begin.
