Relief Rally ahead of next week’s Fed decision

Dear Traders,

The Bank of England’s minutes sounded, against all odds, less dovish even though only 1 MPC member voted to raise rates. The pound advanced as a result and broke easily above the 1.54-mark. BoE policymakers said global developments haven’t shaken their conviction that the time for a rate increase is approaching. However, the BoE is likely to wait for the Fed to do the first step and see how the market reacts.

Sterling bulls had several profitable chances to gain profits. Today, traders should keep an eye on the BoE Inflation expectations, scheduled for release at 8:30 GMT. GBP marked a current resistance at 1.5475 and bulls could be looking for prices above that level in order to drive GBP for a test of 1.55.

Euro traders had to be patient and must unfortunately record further losses before the euro finally showed some upward momentum towards $ 1.13. Given the uncertainty going into next week’s Federal Reserve decision, volatility should be on the rise, leading to a possible relief rally towards 1.14 in the EUR/USD.

Important economic data for today:

12:30 USA PPI reports

14:00 USA Michigan Confidence 

Have a beautiful weekend!

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