Last week the currency pair updated the high of October 2010, having broken above all the option barriers restraining it for almost the entire March. In connection to this there are new levels: 1.6327 and 1.6449. 1.6500 remains to be the psychological level. Last week the Bank of England left the key interest rate unchanged.
The UK’s CPI and Trade Balance releases are scheduled for today. Core CPI is expected to stay unchanged. Consequently, any deviation will cause a volatility spike. As for Trade Balance, it is expected to show import growth. In general, growing import has a negative impact on the GBP exchange rate. However, from the standpoint of volatility we are interested in any deviation for the forecast and previous data.
Yesterday the US opened a season of quarterly reports. Last week the market was waiting for this. The volatility was very low. Since this week everything may cardinally change.
In general, the day is rich in significant news, which favors those who buy volatility.
Provided by the Department of Options,
