Friday’s somewhat positive NFP has weighed somewhat on cable in early trading this week while some participants had also considered a double hike by the Bank of England last Thursday to be possible. Overall, traders seem to have reacted positively to the British government’s new plans to expand domestic production of oil and gas. The BoE was overall somewhat less gloomy too in last week’s press conference.
Inflation in the UK clearly remains stickier than most other large, advanced economies at 7.9% for the annual non-core figure in June. Next week’s release of British inflation for July is centrally important for the pound and for evaluating how the BoE might act on 21 September, the day after the Fed’s next meeting. Friday’s quarterly British GDP – although only a preliminary release – might see higher volatility continuing after US CPI on Thursday.
In the absence of any clear evidence that the uptrend is over, the bias on the whole remains to the upside for cable. 3 August’s dragonfly doji as the slow stochastic signalled oversold would usually be considered a strong buy signal in the context. Volume also appears to support a buy signal. If the releases later this week don’t deviate significantly from the consensus, this might be a good opportunity for new buyers to enter with relatively lower risk compared to waiting for $1.295 or higher.
Inflation in the UK clearly remains stickier than most other large, advanced economies at 7.9% for the annual non-core figure in June. Next week’s release of British inflation for July is centrally important for the pound and for evaluating how the BoE might act on 21 September, the day after the Fed’s next meeting. Friday’s quarterly British GDP – although only a preliminary release – might see higher volatility continuing after US CPI on Thursday.
In the absence of any clear evidence that the uptrend is over, the bias on the whole remains to the upside for cable. 3 August’s dragonfly doji as the slow stochastic signalled oversold would usually be considered a strong buy signal in the context. Volume also appears to support a buy signal. If the releases later this week don’t deviate significantly from the consensus, this might be a good opportunity for new buyers to enter with relatively lower risk compared to waiting for $1.295 or higher.