Traders cautious on Sterling after BoE comments
After the BoE sucked the wind out of GBP last week, it may take some time for a market trend to appear. The bullish bets for an end of year push to £-€1.20 & £-$1.40+ are almost certainly off, but it's unclear whether the EUR & USD can take advantage from here.
£-€ is trading at a 5-week low currently, but does have a strong resistance level at 1.16. Plus, the Euro is out of favour on the market at the moment and so if we were to hazard a guess for the weeks ahead, we expect to see mid-market floating between 1.16-1.17, the average rate since June and still a favourable one.
£-$ is a little more tricky with the USD being a safe haven currency and with a downward trend performance since June. This pair is down 3% in the last 3-weeks and so is likely to bottom-out at some point, but this would come down to the FED and global investor sentiment as to when.
Onto this week then and there is important figures due out for the majors, but all are expected to come in as forecast. German & the US inflation rate are worth watching out for and then of course the UK's GDP figure. A modest acceleration in September is estimated and show that the economy is still on the right path to pre-pandemic levels before the year is out. We should have official Brexit news this week too on the hard border issue with Northern Ireland after tensions have been steadily rising in the background.