Since the ‘hawkish’ statement from the Bank of England Governor Andrew Bailey on Sunday, after warning the bank would “have to act” to curb inflationary pressures, the pound has held its ground. Mr Bailey sees plenty of transitory inflation, but his all-seeing monetary policy eye is also spotting underlying medium-term pressures as well. This, in terms, has put a firmer stance to the start of a new week as the British pound accumulates gains on Monday. Further, he acknowledged that there are some supply-side concerns. In addition to that, the caution following the U.K. and EU new round of negotiations on the Northern Ireland deal after London demanded extensive changes in the deal. Based on the technical aspect, the Relative Strength Index (RSI) 3-daily ‘lookback’ indicator has buckled, although it still holds a positive signal, while the Moving Average Convergence Divergence (MACD) holds a positive signal. Remaining to a bullish stance now views an extension (squeeze) to 1.3780-1.3815 before the focus reverses to the 1.3645 support. Reassess from there.
Updated: 4 days ago