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GBP/USD Forecast 17 May 2016

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GBP/USD Forecast 17 May 2016
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The economic calendar of Monday was poor. However, the pair GBP/USD strengthened significantly and reached the level of 1.4398.

Today, the pair GBP/USD has already added around 90 points and came closer to the mark of 1.45.

The pair retreated from the 100-day moving average and may continue the recovery after the publication of the UK reports.

We already know that the Bank of England expects inflation growth due to the strengthening of the oil price. This factor has allowed the regulator to expect an inflation rate of 2% in mid-2018. It’s not so fast but it’s still faster than it was expected even in the February report.

Today the UK will present data on the annual CPI, which is expected unchanged. The monthly CPI is expected to decline by 0.3% against the previous 0.4%.

The United States will present data on building permits, which is expected to increase by 4.3% compared to the previous -7.7%. The Core CPI is expected to grow by 0.2% against the previous 0.1%.

How to trade

The pair GBP/USD has reached its strategic goal of 1.4470. Its further growth is possible in the case of strong the UK data. If the United States presents positive data, we expect the decline. We are waiting for a reversal of the pound from 1.4510. We would buy put options if the pair GBP/USD grows above 1.4510 and start to decline after the strong US data.

Asset: GBP/USD
Direction: Put
Target price: 1.4510
Expiry time: 20:00 GMT

Disclaimer: The article is written for informative purposes only and it is not financial advice. The author does not have any position in the currency pairs mentioned, and no plans to initiate a position. He wrote the article himself and expressed his own opinions. He has no business nor personal relationships with any mentioned government entities or stocks. Readers should not treat any opinion expressed by the author as a specific inducement to make a particular trade or follow a particular strategy, but only as an expression of his opinion.

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