News & Analysis at your fingertips.

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. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
More View more
Real Time News
  • Do you know how to properly Identify a double top formation? Double tops can enhance technical analysis when trading both forex or stocks, making the pattern highly versatile in nature. Learn more about the double top formation here: https://t.co/t9FlspUVZz https://t.co/FFMy5O9YoY
  • It’s important for traders to be familiar with FX spreads as they are the primary cost of trading currencies. Understand a pair's spread here: https://t.co/zEEUHZBx7g https://t.co/jZHcyAZ5SU
  • Further your forex knowledge and gain insights from our expert analysts on EUR with our free guide, available today: https://t.co/XtydfV5wS6 https://t.co/Iw9haaHAnn
  • The Federal Reserve System (the Fed) was founded in 1913 by the United States Congress. The Fed’s actions and policies have a major impact on currency value, affecting many trades involving the US Dollar. Learn more about the Fed here: https://t.co/ADSC4sr63f https://t.co/raO3gCGqQ6
  • Key levels in forex tend to draw attention to traders in the market. These are psychological prices which tie into the human psyche and way of thinking. Learn about psychological levels here: https://t.co/8A1QhwMVKo https://t.co/rWVlBs6H3c
  • The update to the US Consumer Price Index (CPI) is likely to sway the US Dollar during the Federal Reserve’s blackout period as the central bank braces for a transitory rise in inflation. Get your weekly $USD forecast from @DavidJSong here: https://t.co/JTuP7CLlyi https://t.co/tOvqn3Gdpc
  • Becoming a forex trader means living and breathing the excitement, risk and reward of trading in the biggest and most liquid market in the world. Do you have what it takes? Read here to discover the qualities and processes it takes to build consistency: https://t.co/EfWEACQ6Cz https://t.co/s5dn4ZKnku
  • Becoming a forex trader means living and breathing the excitement, risk and reward of trading in the biggest and most liquid market in the world. Do you have what it takes? Read here to discover the qualities and processes it takes to build consistency: https://t.co/EfWEACyvdZ https://t.co/6VjW5FEiQW
  • Global stocks bounce back from recent pullback as key resistance levels lie ahead. Get your weekly equities forecast from @HathornSabin here: https://t.co/wXSWo1JygD https://t.co/vWVaSEQTXT
  • Do you know how to properly Identify a double top formation? Double tops can enhance technical analysis when trading both forex or stocks, making the pattern highly versatile in nature. Learn more about the double top formation here: https://t.co/t9FlspUVZz https://t.co/9kfBu04auM
BoE's Hawkish Quarterly Inflation Report Ignites GBP-crosses

BoE's Hawkish Quarterly Inflation Report Ignites GBP-crosses

Christopher Vecchio, CFA, Senior Strategist

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