As in the title – looking at the economic calendar we will notice several important GBP-related items. Already on Wednesday we will know the rate of inflation in the UK, and on Thursday the Bank of England will inform us about interest rates and what monetary policy it plans to pursue in the coming months. Interestingly, it is also Friday that is packed with data from the UK – we will learn the Gfk consumer confidence index and results from the retail market.
Undoubtedly, the GBP will react to these data and it is difficult to predict anything at this point. The market expects an interest rate hike of another 0.25% to 4.75%. The relationship between the size of inflation and % rates is important. Inflation is expected to fall to 8.5%. But what if it doesn’t and turns out to be higher than expected? This could force the BoE to raise rates higher and the pound could gain in value. At the last BoE meeting, of the 7 policymakers, 2 voted to leave rates unchanged and 5 voted for a hike. Will Thursday bring a change in this ratio?
Technical analysis of GBPUSD
Last week was strongly upward, the price overcame the support/resistance level of 1.2680 without much difficulty. In anticipation of the next macroeconomic data, the price may make a correction to the mentioned level. A big influence on the direction of the market in the longer term will be the data cited in the introduction.
On the daily chart we can mark the neck line of the inverted H&S formation, which has been tested several times from the top. If the GBP gains after the data, then the increases in the first impulse may reach 1.2980-1.3000.
We can discuss more about this pair and several others during my live sessions:
LIVE EDUCATION SESSIONS
This WEEK (19-24 June) I am pleased to invite you to several online sessions. Below is the schedule of meetings:
Links: BASIC (beginners room) ADVANCED ROOM
The above analysis is based on the PA+MACD strategy, a detailed description of which you can read HERE . I will talk more about the PA+MACD strategy applied to these currency pairs during the live trading sessions which you can attend from Monday to Friday.
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