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EUR/GBP Trading - BoE Gov. Carney Speech - 16 Jan 2017

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EUR/GBP Trading chart 16 Jan 2017
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Bank of England Governor, Mark Carney to speak today

The Bank of England Governor Mark Carney is expected to speak later this afternoon. The central bank governor will be giving a speech titled "Policy Issues Affecting the Bank of England" at the London School of Economics. His speech comes ahead of tomorrow's press conference from the British Prime Minister Theresa May who will be speaking about her vision of Brexit. The British gapped lower this morning in anticipation of this week’s events that could hurt the GBP currency pair.

The British pound opened another week by gapping lower across the board

While last week the GBP opened weaker on comments from PM Theresa May on Brexit, this week, the British pound faces a tough week challenged by both Brexit and some key economic reports. Needless to say, the GBP will be quite volatile this whole week. Kicking off this tough week will be the speech from Mark Carney, which comes ahead of tomorrow’s inflation report. Any references to monetary policy in terms of inflation will be key for the markets tomorrow.

However, it is tough to expect a straight reaction from the GBP crosses this week as the markets will also be looking to the comments from the British Prime minister who will be giving out more clarity on the Brexit talks. Readers should bear in mind the fact that the UK’s Supreme Court is yet to deliver its verdict on whether Brexit requires an approval of the parliament, which was contested by the British government.

How to trade binary

EURGBP has gapped higher on today opening at £0.8835. Price action is so far bearish, with the euro trading just below £0.8880 which marks the breakout level from the long term rising trend line few months ago, back in November 2016. In the short term, EURGBP could be seen pushing lower to fill the gap near £0.8732, thus daily PUT's are ideal to purchase near £0.8819.

From a technical outlook, Carney’s comments could be hawkish if there was indeed any reference made to monetary policy, which will be the main event risk for today. Either ways, the technical chart shows that a pull back in EURGBP is pending and it would be likely that the euro will slip back towards £0.8732 support ahead of further gains in the medium term.

Therefore, look to purchase PUT options near 0.8819 for a 21:00 GMT expiry time.

Asset: EUR/GBP
Direction: Put
Target price: 0.8819
Expiry: 21:00 GMT

Disclaimer: The article is written for informative purposes only and it is not financial advice. The author does not have any position in the currency pairs mentioned, and no plans to initiate a position. He wrote the article himself and expressed his own opinions. He has no business nor personal relationships with any mentioned government entities or stocks. Readers should not treat any opinion expressed by the author as a specific inducement to make a particular trade or follow a particular strategy, but only as an expression of his opinion.

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