Is this a beginning for Cable to dip below 1.50?
Unfortunately for those hoping for an interest rate rise in the near-future in the UK things are not going accordingly to speculations from earlier this year.
Sterling gained some strength in the beginning of this week only to be hit by a heavy sell off during and after the Bank of England inflation hearing.
Governor of the BoE said he did not expect inflation to reach the targeted rate of 2% for three years and at the same time the Bank cut its prediction for UK economic growth in 2015 to 2.9%. The Bank also predicts a short-term inflation rates to drop below 1 per cent in 2015 and thus delays any thoughts of a raise in interest rates.
Technically speaking the Sterling reached the area of 1.5750 (the target area from our analysis last week). And despite higher average earnings in the UK (grew by 1% while analysts forecasted 0.8%) the Sterling is more likely to continue reaching new recent lows across the currency board.
The nearest key support levels fall on 1.53 (last seen in August 2013) and later 1.49 (last seen in July 2013).
As for GBPCAD the market broke the bearish rectangle pattern (falling under the daily SMA300) providing a signal for a way to 1.70 area.
Unfortunately for those hoping for an interest rate rise in the near-future in the UK things are not going accordingly to speculations from earlier this year.
Sterling gained some strength in the beginning of this week only to be hit by a heavy sell off during and after the Bank of England inflation hearing.
Governor of the BoE said he did not expect inflation to reach the targeted rate of 2% for three years and at the same time the Bank cut its prediction for UK economic growth in 2015 to 2.9%. The Bank also predicts a short-term inflation rates to drop below 1 per cent in 2015 and thus delays any thoughts of a raise in interest rates.
Technically speaking the Sterling reached the area of 1.5750 (the target area from our analysis last week). And despite higher average earnings in the UK (grew by 1% while analysts forecasted 0.8%) the Sterling is more likely to continue reaching new recent lows across the currency board.
The nearest key support levels fall on 1.53 (last seen in August 2013) and later 1.49 (last seen in July 2013).
As for GBPCAD the market broke the bearish rectangle pattern (falling under the daily SMA300) providing a signal for a way to 1.70 area.
