The British Pound has seen considerable demand over the last week or so. As I mentioned in the monthly review, the BOE (Bank of England) couldn´t do much about rate hikes even though inflation was picking up.
This is because economic figures are deteriorating in the UK, Brexit is near and PM May has lost her majority in the parliament in a miscalculated attempt to increase it.
Nevertheless, inflation surged higher a few days later and now the BOE is feeling nervous. They are considering hiking rates now against their will. Last week we heard the BOE Chairman Mark Carney make some hawkish comments, hence the 300 pip climb in GBP.
Tomorrow, we are expecting the release of UK manufacturing PMI data and Mark Carney is making another appearance, this time in Frankfurt.
The price climbed 300 pips last week and it stalled right at the 1.3030-40 resistance level, which was last week´s high. It has been trading around there since last Thursday waiting for today´s GBP events.
Giving it a go at resistance
I say GBP/USD is waiting around here because it really is waiting; if you have followed the forex market long enough, you´d be surprised to see how many times the market hangs around important levels for hours, days and even weeks waiting for some big scheduled forex event.
This is one of those times. The forex market is bullishly biased for this forex pair at the moment, so both Carney and the manufacturing data have to be bullish/hawkish to turn this pair around. We will wait for the manufacturing data to be released and if it disappoints then we might be tempted to open a long-term sell forex signal, but only after hearing what Carney has to say.
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