On Thursday a batch of disappointing American statistics and the Governor of the Bank of England’s, Mark Carney, gave an announcement which prompted traders to close long positions involving the US dollar. The number of unemployment benefits application rose, whilst retail sales fell.
The British Pound strengthened following the release of the Bank of England’s quarterly inflation report and amid indications of an interest rate increase next year. The Dollar/Pound pair broke its upper corridor limit, 1.5280, and made for the U3 line. Growth slowed at the daily LB.
During Carney’s speech, a 11th February maximum was reached (1.5298) and following this is was clear that the bulls would push the rate to 1.5351. By the end of the 12th's trading, the daily trend line had been broken. This is an indication that within the confines of an upward correction, growth could keep continuing to 1.5594/1.56. According to the forecast, I expect a renewal of the maximum and a dip to 1.5370/75. Resistance in Europe is around the 1.5435 level.