The BoE indicated that a rate hike could come towards the end of the first quarter of 2015, or the beginning of the following quarter, dampening expectations of an early rate hike, and stressing that although the economy is improving a rate hike is still not justified, it would be, only if slack in the economy started to diminish and inflation
starts to pick up. "Unless inflation
expectations really start to take off, the BoE will judge that there is enough slack in the economy to keep rates on hold for a while yet," he said in a note.
I believe that a downside correction that is deeper is likely, as "weak longs" cover their position and could be a strong reason for profit taking on longs.
Technically, the price has completed a head and shoulders
top over the four-hour chart, by breaking the key support area
around 1.6820, I will be looking to short near that area if we witness the pullback, targeting 1.6700 and 1.6655 levels. Holding back above 1.6875 will probably force me to exit.
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