Yesterday, the cable reached a low of 1.4010 under the pressure from the Fed and the Bank of England. The pound lost 187 points, but then reversed.
Yesterday we received news that Brexit may be delayed. This gave support to the British pound, and the cable was able to recover and close the trading at 1.4198.
Today, the pair GBP/USD is trading above the yesterday's opening price. Perhaps the pound also gained support due to yesterday's data on the growth of retail sales, 0.9% in May. However, the US Philadelphia Fed Manufacturing Index rose from -1.8 to 4.7.
We can assume that after yesterday's events today we don’t get any surprises. Today, the US is to publish data on building permits, which suggests the growth.
It seems that today the pair GBP/USD will return to the usual range of 1.4090-1.4250.
How to trade
We would buy put options if the pair drops below 1.42.
Target price: 1.4200
Expiry time: 20:00 GMT