Moves in GBP/USD dominated headlines after the BoE’s inflation report brought downgrades to growth and inflation. The main concern is that weak economic growth in Europe is likely to impact the UK. This was enough to take the pair to its lowest since September 2013 and some traders would have been looking to add to shorts. Momentum is still firmly to the downside and the pair has not quite dipped into oversold territory yet. A key level I’m watching at the moment is $1.5722 which is the 61.8% retracement of the July 2013 to July 2014 rise.
Meanwhile, EUR/USD is just holding on but the downtrend remains well intact. While the pair managed to reclaim $1.2400, there is still room to sell into strength and traders will be eyeing this closely. On the calendar today we have final CPI readings from Germany and France. Not much is expected from these readings but tomorrow we have preliminary DGP readings from France and Germany. These will be pivotal, as we continue to hear growing calls of a recession. Traders should consider selling any moves into the $1.2500 region which was previous support.