Cable within striking distance of 1.70

The sterling hasn’t done much since it spiked on the back of Mark Carney’s comments last week. 


In fact, GBP/USD has been sidelined a touch below 1.70, but still remains within touching distance of that level. The 1.70 mark seems to be capping gains at the moment and I feel it will continue to do so until we get a fresh catalyst.

There are a few releases this week which could trigger some sterling volatility. The data kicks off with UK CPI expected to show a 1.7% rise. In fact, the market is looking for a minor pullback in the May CPI reading. Any signs of further strength in price momentum could push the sterling higher in the near term and finally see it break that barrier against the greenback. This will then be followed by the BoE MPC minutes tomorrow and retail sales on Thursday.

A change in bias among BoE members on the rate hike timing will only fuel the rate hike argument further. To the contrary, if data and commentary suggests caution is needed, then this 1.70 level could be a barrier that triggers a near-term pullback. To the upside, I would wait to see a close above 1.70 before buying cable. 

IGA, may distribute information/research produced by its respective foreign marketing partners within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

This information/research prepared by IGA or IGA Group is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. In addition to the disclaimer above, the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.

See important Research Disclaimer.