Currency Trading Strategies
The chart explains exactly what we are looking for cable and believe me there is a 300 fx Pips move either way coming up on cable, read more on how to analyse the forex market and integrate currency trading strategies into your current fx plan accordingly:
- For a Bullish Setup: I am looking for a close above 1.5642 on a daily with a target of 1.5940.
- For a Bearish Setup: I am looking for a close below 1.5465 on a daily with a target of 1.5170
What to expect from Bank of England’s simultaneously publishing its interest-rate decision, the minutes of its policy meeting, and the Quarterly Inflation Report forecasts today
One of the biggest days for sterling today
My Internal sources from the institutional world are all not in any favour of rates hikes till next year for sterling, please do not take this as gospel but that is my personal view as well, I am a firm believer that the UK will only make a move when the US does. The quarterly inflation report will likely highlight economy looks stronger than it did three months ago. Growth bounced back to 0.7% in 2Q, slightly better than the central bank had projected. Productivity looks perkier.
Faster supply growth could, in principle, mean weaker inflationary pressures. But probably not in this case as wage growth has picked up smartly too. The expansion seems to be gradually shifting onto a more sustainable footing. There are probably fewer reasons to think inflation will undershoot the 2% target in the medium term. Indeed, “some” members said in the July minutes that the risk of inflation rising above the target in the medium term had risen. In other words, we do not expect the BoE to push back on the recent upward move in interest rates.
We at Platinum, by following our currency trading strategies, believe that we will see a 25bp BoE hike in February next year, followed by hikes of the same magnitude in August and November
Given the vast amount of information that will become available at the same time, the initial GBP reaction, therefore, may not necessarily be the right one in the first few instances and in some regards “Super Thursday” could turn into the UK version of US non-farm payrolls day as one of the most significant trading days for the pound. As such, we would expect GBP volatility to be elevated each quarter when the minutes and decision are accompanied by the release of the Quarterly Inflation Report
What will matter for FX markets from the variety of BoE releases is the voting pattern and the extent to which some members’ decisions were “finely balanced” from the Minutes and the medium-term inflation projections based on current and market-based rates from the Quarterly Inflation Report. We would isolate these themes as focal points for the currency and integrate them in our currency trading strategies.
Have a wonderful day, read more of Platinum Trading Academy’s blogs for the latest /blog/forex updates and currency trading strategies.
The Platinum Team
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