The British pound is consolidating its losses and preparing for the next move
After losing several big figures in recent sessions due to lowered inflation expectations which is likely to leave the Bank of England on hold for the foreseeable future, the GBP/USD pair is currently trading around 1.5112 and is preparing to move into a new direction. Where will that be, depends on key levels which might get broken on the chart.
The key development which the markets are awaiting today are the FOMC minutes, which will be revealing the most current discussions by the Federal Reserve Open Market Committee as to the future course of interest rates in the U.S. While many economists expects a touch more hawkish rhetoric, there could be a surprise.
The key piece of information for the UK economy is how will it fare in the environment of lower oil prices. There are several reports which are outlining that Great Britain's GDP could get boosted by between 1 and 1.5% due to the declining costs of fuels.
For now the course for the pound has been chosen by the markets lower. The support which has been lying around 1.51 was eclipsed in early New York trading and the pair is headed for 1.5000 soon. As for today we would be gladly purchasing puts on the GBP/USD binary options forex pair.
The level at which we are looking is 1.5100, which was the previous support line before the break lower occurred. In the mean time we would be closely watching for other developments on the data front, meaning the FOMC minutes being released at 19:00 GMT.
For the most part it should be a non-event, but then if the news provides a spike higher in the GBP/USD binary options forex pair, we will be more careful to assess our opportunities for trading. As the old wisdom of financial markets says - there will always be trading opportunities.