We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

Free Trading Guides
EUR/USD
Bullish
Oil - US Crude
Mixed
Wall Street
Bullish
Gold
Bearish
GBP/USD
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
USD/JPY
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
More View more
Real Time News
  • The trio of central banks overseeing the commodity currencies have already cut their main rates to all-time lows. Get your market update from @CVecchioFX here: https://t.co/OSUXrN5P3j https://t.co/3nwDel6e28
  • The tension from March continues to subside, allowing for the $USD to slide to fresh two-month-lows. Get your currencies market update from @JStanleyFX here: https://t.co/bRSRjUqg6Z https://t.co/Q35YpIZEd2
  • López Obrador hopes #USMCA will help tighten trade relationships between the US and Mexico. Get your currencies market update from @HathornSabin here: https://t.co/bZrUKSCGaS https://t.co/MZ7UoiWWRj
  • The $AUD may suffer as relations between Australia and China deteriorate amid dwindling growth prospects. Euro traders will be closely watching progress in talks about a €500b recovery fund proposal. Get your market update from @ZabelinDimitri here: https://t.co/LkEFJViPWY https://t.co/sofO135ElG
  • The US Dollar could rise against #ASEAN currencies such as the Singapore Dollar as US-China tensions seem to escalate. The Indian Rupee is also looking ahead of local 1Q GDP data. Get your ASEAN currencies market update from @ddubrovskyFX here:https://t.co/LkEFJViPWY https://t.co/ZGFaQQ3Hr2
  • The #Euro is the big driver here for DXY as it is 57% of the index. It is rising now and trying to break above the March 27 high at 11147. Get your $EURUSD technical analysis from @PaulRobinsonFX here:https://t.co/6gt3F9LuGP https://t.co/73SaL5AeXD
  • U.S. Market Analyst at https://t.co/JsVsSmefgR, Shain Vernier covers - ✔️ Safe haven assets in volatile markets ✔️ Central banks and governments ✔️ How will commodities trade in a recession Only on Trading Global Markets Decoded #podcast. Tune in here: https://t.co/1UmEzEbwiy https://t.co/EIC9YqfTec
  • Anybody else think that casting directors in movies are some of the most underrated people when it comes to giving a film/series credit?
  • No https://t.co/EoBltaP17k
  • Crude #oilprices may face heightened liquidation pressure as the cycle-sensitive #commodity finds itself under the pressure of resilient resistance and a vulnerable, multi-week rising channel. Get your crude #oil market update from @ZabelinDimitri here: https://t.co/cGPX4qcOH1 https://t.co/0U4JMJVFuf
BoE's Hawkish Quarterly Inflation Report Ignites GBP-crosses

BoE's Hawkish Quarterly Inflation Report Ignites GBP-crosses

2015-02-12 11:45:00
Christopher Vecchio, CFA, Senior Strategist
Share:

Talking Points:

- GBPUSD rips back above 1.5300 on BoE's QIR.

- Key reversals in GBPAUD, GBPCAD, EURGBP lead way.

- See the February Forex Seasonality report and the implications for the majors.

Optimism within the Bank of England's Quarterly Inflation Report about domestic conditions in the UK have spurred the British Pound to fresh weekly, monthly, and in some cases, multi-year highs. We say domestic conditions explicitly because BoE Governor Carney and the Monetary Policy Committee attempted to walk a neutral line in their release, although it certainly didn't feel that way.

Through and through, the blame for disinflation seen in the UK - which prompted the BoE to cut its 2015 inflation forecast from +1.4% to 0.5% - was in large part placed at the feet of the external environment (falling energy prices, global deflation trend). Policymakers painted nothing short of a rosy picture for the UK itself: growth would accelerate to +2.9% in 2015 and 2016, and come in at +2.7% in 2017; the unemployment rate would continue to fall to 5.0%; slack in the economy would likely be eliminated in 18-months, probably occurring this year; and real wage growth in 2015 would be the highest of the decade.

So even though Governor Carney et al. included a mandatory 'we're prepared to do more QE if things get worse' phrase, the sentiment has rang hollow at best. GBPUSD rallied quickly back above $1.5300; EURGBP dropped back to seven and a half year lows under £0.7400; and GBPAUD and GBPCAD continued in their recent breakouts.

Irrespective of our interpretation of the BoE's QIR, the technical foundation laid around this report is encouraging for GBP bulls. On the H4 timeframe, bullish key reversals (price moves below the prior period low, then rallies to and achieves a close above the prior period high) are seen developing across the spectrum. At a minimum, they offer explicit levels to work around for long entries. Having been involved in several long GBP trades the past few weeks (long GBPAUD, GBPCAD, and short EURGBP), these candles offer clear points of risk moving forward.

See the above video for technical considerations in GBPUSD, EURGBP, GBPAUD, and GBPCAD.

Read more: EUR/USD Coils in 100-pip Range; GBP-crosses Breakout Before BoE

--- Written by Christopher Vecchio, Currency Strategist

To contact Christopher Vecchio, e-mail cvecchio@dailyfx.com

Follow him on Twitter at @CVecchioFX

To be added to Christopher’s e-mail distribution list, please fill out this form

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES

News & Analysis at your fingertips.