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GBP/USD Signal - UK Inflation - 16 Aug 2016

Signal details
Entry Price: 
1.3035
Close Price: 
1.3038
Direction: 
Low
Expiry Time: 
20:00 GMT
Result: 
OTM
How we trade
5/5 of 2 ratings

The GBP/USD pair has marked a sharp rally today so far after the release of higher than expected producer price inflation. The reading came in a +3.3 per cent, when compared to expectations for a 1 per cent increase. The prices which producers are paying are the first signal that inflation rates are moving higher, a development that may halt the Bank of England from cutting rates more and printing more money.

The sharp rally is likely to be halted on the approach towards key levels in the 1.3030-40 area. The pair has previously attempted a move towards this level last week, after which it fell through into the 1.28's on Monday. We would be buying daily and hourly puts at the 1.3035 level until the end of the trading session in New York.

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.