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GBP/USD binary signal - BoE Carney speech - 19 Feb 2018

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21:00 GMT
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The governor of the Bank of England, Mark Carney is scheduled to speak today at 18:45 GMT at the Regents University of London. Amid a slow day on the economic calendar today, Carney comments could bring some volatility to the British pound.

Investors will be closely watching comments from Carney especially in reference to any points about the possibility of the next rate hike from the Bank of England. At the recently concluded BoE meeting, Carney said that the central bank expects to hike interest rates sooner than expected.

Carney's comments came inflation in the UK was seen stabilizing around 3.0% on a yearly basis in the month of January. Since the Brexit event, consumer prices in the UK have surged strongly.

This came initially due to the weaker exchange rate in the British pound. However, after crossing the BoE's 2% inflation target, consumer prices continued to move higher. The faster pace of inflation increase started to put a squeeze on household income and spending due to lack of wage growth. Recent data showed that retail sales reports were weak for two consecutive months.

Based on the above, today's binary signal is GBPUSD. The currency pair was seen rising to fresh highs last week as the reversal came amid a weakness in the U.S. dollar. Last week's gains in GBPUSD also ignored the weak retail sales report.

In the near term, we expect that GBPUSD is likely to resume its correction to the downside as the currency pair had initially posted a reversal mid-way through the correction. Last week's rally to 1.4121 was met with a strong reversal immediately.

Therefore, we would purchase daily PUT options in GBPUSD at 1.4040 which marks an intraday resistance level. We expect GBPUSD to briefly rise close to this level before closing lower on the day.

binary options signal gbpusd 19 feb 2018

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. 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. All risks and coasts associated with online trading are your responsibility.