The British pound is consolidating before its next move
The British pound has been rallying modestly this morning after hitting a daily low around 1.5620 in early European trading. The main reason for the rally has been the optimistic picture drawn by the data set released from the UK this morning, however the US dollar remains resilient.
The latest move in the GBP/USD forex pair is somewhat weighing on the current market sentiment, however it will take a more substantial move in order for us to pick a market direction with confidence. The pair is stuck within a range and we would like to see a breakout in order to buy our binary options.
The UK's services PMI number has improved markedly to 58.6 after dropping somewhat during the previous month (56.2). The number was initially dismissed by market participants, however after about an hour the GBP/USD biying picked up steam to drive the pair closer towards 1.5700.
The pace wasn't strong enough to warrant a reach of the level, but a daily high around 1.5998 was registered before the pair retreated to current levels around 1.5675. Ample risk appetite will be the main driver for the British pound going forward as the Bank of England is still expected to hike rates next year later than the Federal Reserve.
While the current market expectations are pricing in a Fed move in June, the Bank of England's governor Mark Carney stated during the last inflation report compiled by the Bank of England that the UK central bank will more likely act in the 3rd quarter of 2015.
Looking at the charts we would refrain from buying calls and puts before the trend lines displayed on the screen are broken. Our call buying trigger is an hourly close above the 1.5705-10 area, while our daily put buying appetite will rise if we see a break below 1.5625-30.