The Cable expects tomorrow's BoE meeting.
Despite the general mood of the market that the BoE is "forced" to lower the rate at the next meeting, Mark Carney didn’t mention this issue in his speech yesterday.
Moreover, he hinted about the likelihood that the rate may not be lowered. After his words, the market has reduced the likelihood of lowering rates to 50%. Moreover, rapid change of the Prime Minister gave a psychological stimulus for the growth of the British pound.
Yesterday the head of the Federal Reserve Bank of St. Louis James Bullard also hinted that the Fed may delay a rate hike.
Today the British Pound continues to have an incentive to increase before tomorrow's meeting of the Bank of England.
Today the US will publish a report on the federal budget in June. The forecast is 24.2 billion dollars - in June it’s the lowest figure for the last 3 years.
In anticipation of the BoE meeting, we believe that the pair GBP/USD will show the sideways movement in the range of 1.3200-1.3330. However, we do not exclude reduction to 1.3100.
How to trade
We would buy call options if the pair GBP/USD rises above 1.3335. We would buy put options if the pair falls below 1.3215.
Expiry time: 20:00