Talking Points:
– GBP/USD Nullifies Threat of Head-and-Shoulders Reversal Ahead of BoE Meeting.
– USD/CAD Preserves Bearish Sequence Despite Lackluster Canada Employment Report.
Ticker
Last
High
Low
Daily Change (pip)
Daily Range (pip)
GBP/USD
1.3183
1.3224
1.3094
81
130
GBP/USD is on the cusp of testing the 2017-high (1.3268), with the pair at risk for a larger advance ahead of the Bank of England’s (BoE) September 14 meeting as it nullifies the threat of a near-term reversal.
The BoE will have much to discuss as the both the headline and core U.K. Consumer Price Index (CPI) are expected to pick up in August, while Average Weekly Earnings are projected to increase for the second consecutive month in July. Keep in mind, Sir David Ramsden appointment to the Monetary Policy Committee (MPC) is likely to yield a 7 to 2 split as Ian McCafferty and Michael Saunders continue to push for a rate-hike, but signs of heightening price pressures may encourage the BoE to slowly abandon its wait-and-see approach as some officials argue ‘the withdrawal of part of the stimulus that the Committee had injected in August last year would help to moderate the inflation overshoot while leaving monetary policy very supportive.’
In turn, the fresh rhetoric coming out of the BoE may largely shape the near-term outlook for GBP/USD as ‘monetary policy could need to be tightened by a somewhat greater extent over the forecast period than the path implied by the yield curve underlying the August projections.’
GBP/USD Daily Chart
