The Sterling has been steadily weakening since peaking at its year high of 1.4769 against the Greenback on May 3rd and previously we did not see the Cable at that level since December 31, 2015.
A combination of “Brexit” uncertainty and fears that the previous GBP rally was very much overdone continues the GBP downward momentum.
“Super Thursday”
All eyes are towards this week’s UK key Economic Calendar events at 11am GMT on Thursday May 12th. These many simultaneous releases out of the UK this week is referred to as Super Thursday.
- BoE Asset Purchase Facility
- BoE Interest Rate Decision
- BOE MPC Vote Unchanged
- BOE MPC Vote Cut
- BOE MPC Vote Hike
- Bank of England Quarterly Inflation Report
- Bank of England Minutes
While the Bank of England isn’t expected to make any changes to their fiscal policy or interest rates, the meeting minutes will likely include the prospect of major changes in the event of a ‘Brexit’.
The inflation report should also cause volatility, even though it is only listed as a medium-impact alert on the economic calendar. Any sign that policymakers have reduced inflation forecasts will increase demand for the Pound.
Where To Now?
For over a month now, the GBPUSD has been trading in a range between January’s high of 1.4815 and February’s low of 1.3834. After Super Thursday, will we see continued short momentum or a return to the previous rally? Only time will tell.
At ForexSignal.com we will trade the Sterling with caution until after the market reacts to Thursday’s events. If you are trading the GBP on Thursday, be sure to check your risk management settings and remember that the market may be prone to spikes and slippage on a big release day. Once the market settles down, we look forward for opportunities to send Forex Signals for the GBPUSD during the USA and European session or perhaps even the GBPJPY during the Asian session.
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