GBP/USD holds $1.54
The pound has rocketed against the dollar after Mark Carney delivered a more hawkish inflation report than the market anticipated yesterday, and GBP/USD has breached the $1.54 level. Despite Mr Carney noting he would cut rates further if needed, the upgrade to UK growth and wage forecasts caught traders’ attention.
Even if the UK enters deflation it will be short-lived, owing to weak oil prices and not fading British demand, which will help GBP/USD shake the downward trend that it has been stuck in.
There is consolidation in the $1.54 region, and if the pound fails to hold this metric the downside support at $1.5340 will be brought into play. If $1.5340 is punctured then $1.53 will be the initial target and then 50-day moving average of $1.5275 will be in sight.