- Heavyweight UK data will define the central bank’s next move.
- GBP/USD buoyed by de-escalation hopes
The latest UK jobs and wages report will have pleased the hawks at the Bank of England with both sets of data beating market expectations, confirming the robust nature of the jobs sector.
UK Unemployment in Line, Wage Growth Adds Inflationary Pressure on BoE
On Wednesday, the latest UK inflation numbers will be released at 07:00 GMT and these will also be closely followed by the BoE. Both the jobs market and inflation are priorities for the central bank and a further increase in UK price pressures may well seal the deal for a 50 basis point rate hike at the March MPC meeting.
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Sterling is pushing higher against the US dollar today as news begins to filter out that Russia is returning some of its troops back to base after conducting recent drills on the Ukrainian border. As ever, news flow can change in an instant so the latest move higher should be treated with some caution.
Cable is testing the recent 1.3572 double high and a break above here would leave the 1.3600/1.3610 as the next area of interest. On the downside, 1.3515/1.3530 should act as initial support for the pair.
GBP/USD Daily Price Chart – February 15, 2022
Retail trader data show 51.66% of traders are net-long with the ratio of traders long to short at 1.07 to 1. The number of traders net-long is 4.35% higher than yesterday and 8.91% lower from last week, while the number of traders net-short is 5.70% higher than yesterday and 8.25% lower from last week
We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests GBP/USD prices may continue to fall. Yet traders are less net-long than yesterday and compared with last week. Recent changes in sentiment warn that the current GBP/USD price trend may soon reverse higher despite the fact traders remain net-long.
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