British Pound Breaks Above Post-Brexit Levels: The GBP broke above the post-Brexit levels on Friday for the first time since the UK referendum in 2016 and confirmed above the key resistance level at Asian market open today both versus the USD and JPY. For those who have been in a bullish GBP position since the Brexit vote, including myself, this is certainly good news.
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On Thursday, a punchy set of minutes from the Bank of England indicated that Mark Carney and his esteemed band of policymakers was finally gearing up to raise interest rates for the first time in over a decade.
However, according to the Independent, researchers at UniCredit said that what the Bank of England has done supports their view that the currency will continue to strengthen in the short term. “Our long-term view, however, remains bearish.” Despite increasing odds of a rate hike later this year or early in 2018, they still say that such a move would be a “policy mistake” considering the wider state of the economy.
Technical Points: British Pound Breaks Above Post-Brexit Levels
We sent out an Ichimoku-based bullish signal to our premium investing group members last week for GBP/JPY. Since then, the pair has gone above and beyond the key resistance level of 147. The pair opened Monday’s Asian session testing the 61% Fibonacci retracement level at 150.48. If the uptrend holds up, the next resistance level could be set at 155.81.
Coming up …
On the economic calendar today, we have Euro-Zone Consumer Price Index (AUG) released at 9 AM GMT to gauge the region’s inflation. It is expected to tick higher to 1.5% on a YoY basis from the previous reading of 1.3%. Later, BOE Governor Carney Speaks at IMF in Washington, DC at 3 PM GMT, which could further shake the GBP crosses.
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