Range-Bound Pound (GBP)!
The British pound (GBP) has been trading in a narrow range for some time and this week may be one where it tests the outer limits of those ranges. The question is: will it break out? If so, in what direction.
Well that’s a difficult question to answer ahead of time until we see how price action plays out, but there is certainly enough news out of the UK this week to create the volatility for price to trade that range.
Tuesday is CPI data and the retail price index, Wednesday is the unemployment report and the BOE inflation report, and Thursday is consumer confidence and retail sales figures.
It is no secret that the BOE has been living with stubbornly high inflation for some time, but they could get some relief if it comes in lower than the 5.1% that’s expected. This would partially justify thier decision to expand monetary policy to support the slowing economy.
So like any range-bound trading, I will attempt to buy ahead of support and sell ahead of resistance at 1.5875 and 1.6150 respectively.