Theresa May wins Article 50 Commons vote on Wednesday night, a historic House of Commons mandate to start Britain’s divorce from the EU amid warnings that the looming exit negotiations could descend into a diplomatic ‘’fist fight’’.
2 February, AtoZForex – Brexit is quickly becoming a reality as members of Parliament passed a bill on Wednesday night backing the trigger of Article 50. In May’s report today, she could outline a timeline for Britain’s exit from the European Union.
On the calendar for today being Thursday, There is a Bank of England monetary policy announcement along with the Quarterly Inflation Report and a speech from Governor Carney. Additionally, Prime Minister May will be publishing a White Paper containing her Brexit plan.
We are not sure exactly what time her White Paper will be released but the monetary policy announcement and the Quarterly report could be more positive than negative for sterling as the central bank is widely expected to increase its inflation forecast. Growth and inflation have been stronger than expected but the challenge for Carney is assessing how this could change in light of the government’s plans for a hard Brexit. The last time the BoE met, Carney said rates could go up or down in the months ahead.
There have been more improvements than deterioration in the U.K. economy since the last BoE meeting but the slowdown in manufacturing activity, retail sales and average hourly earnings is concerning. It’s going to be a very volatile day for GBP/USD and the levels to watch will be 1.2780 on the upside and 1.2420 on the downside – if either of these levels gives, we could see a much stronger move in the currency.
GBPUSD levels ahead of BoE
From the technical perspective, GBPUSD is still poised to move much higher especially on BoE. The range top is 1.2780 while the range bottom remains 1.2420. As long as the cable remains within this context, we only play the range while we await a valid break.
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