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GBP/USD trading on event risks
It is hard to escape the impression cable is set for a steady drift lower. The data flow from the UK over the past two weeks has dried up, which leaves the pound trading on ‘event risk’ alone, and the possibility of this has gone up significantly over the weekend, thanks to the commentary surrounding Mark Carney’s position.
The failure to hold above $1.22 suggests we will see the $1.21 low of last week tested in due course, with an overbought reading on the hourly stochastics providing a possible entry point. Any rally needs to clear $1.2260, which would clear the way to the 19 October peak at $1.23.