Pound sellers re-emerging after a decent rally 3 August 2016
I highlighted the decent EURGBP demand in the order board post and again after the EZ retail sales data and we're now back to 0.8395 pushing cable back down to 1.3335 which is turning into quite a pivotal area.
I still expect good two-way business for the pound as we head into tomorrow's BOE decision which might yet surprise and have the MPC reconsidering their expectations of a rate cut this month.
Odds and data still favour some action, maybe at least some further QE but equally there is an argument to say they should keep their powder dry until the smelly stuff really hits the fan. Much as the UK data and sentiment is currently on the back foot we're still in the EU and for many its business as usual.
The real test is when we trigger Article 50 and see just how much our trading partners in the EU and globally want to continue under similar terms. One step backward, maybe even two or three. but ultimately the UK should end up moving forward again.
What no-one knows though, and it's a point I've made frequently here, is when that time will be.
GBPUSD holding up as EURGBP fails into 0.8400 and tests 0.8385 again.
