The growth of the pair USD/JPY has helped the British pound to strengthen against the US dollar
Yesterday the pair GBP/USD demonstrated a sharp increase without any fundamental reason. The growth of the pound against the yen helped the British pound to strengthen against the US dollar.
The UK did not publish important news, but investors have noted a high activity from pound buyers against the Japanese yen. Interestingly, something similar we observed on Friday, just on a smaller scale.
It is likely the large investors are already considering the likelihood of the growth of the pound, as fears of a «Brexit» disappear.
Today the UK is to publish data on consumer price index which is expected to grow by 0.4% against the previous 0.3%. The core consumer price index is expected to increase from 1.2% to 1.3%. The house price index is expected to increase by 8.1% against 7.9%. If the data is better than expected, just the strong US retail sales data which will be published tomorrow can stop the growth of the British pound.
How to trade
On the hourly chart, the pair GBP/USD has the key levels: 1.4354, 1.4289, 1.4178, 1.4113. If the pair manages to rise above the level of 1.4289, it will continue to rise to 1.4354. If the pair falls below 1.4178, it will continue to move to the area of 1.4113, where again continue to grow. We would buy CALL options if the pair rises above 1.4289. We would buy PUT options if the pair falls below 1.4178.
Expiry time: 20:00 GMT