Not so long ago, Mark Carney, who is the Governor of the Bank of England, held a speech in front of British businessmen and investors. He confessed that he and his bank were surprised at the recent improvement in the employment stats. It seems like the centra bank wasn’t prepared for such changes.
In August 2013, the central bank decided to revise its easy monetary policy with regard to the 7% range of unemployment in the UK. At the same time, the central bankers assured that they would be guided by multiple factors including inflation, especially since the CPI reached the 2% target.
Now, the members of the BOE have to make up their minds again in order to choose another macroeconomic indicator as a new guideline. This indicator will be used to signal the readiness to raise the interest rates.
At the same time, Mark Carney acknowledges some economic growth in the UK amid the overall global economic stagnation. Yet, the recovery in the Uk is stable, the banker assumes.
Meanwhile, Forex traders are looking forward to the Fed’s report scheduled for tomorrow. More often than not, the price starts creating sophisticated patterns right in advance of such reports. Therefore, it is high time to estimate the mid-term prospects of GPBUSD.
GBPUSD. H4. The long-term bias is bullish (the green arrow). The rally started in July 2013. In December, the price consolidated above 1,6338, the high of 2012. Last week, the price broke above 1,6616 and came close to the high of 2011 located at 1,6747.
The upward move suspended after Carney’s speech in Davos on Friday. Still, the temporary weakness show by the British Pound after that wasn’t supported and confirmed by the allied currency pairs. December’s volume cluster located at 1,6438 remains the MIF-term level of support. If the price breaks nd consolidates below it, we will see a mid-term reversal. At the same time, a break above 1,6416 will resume the long-term rally.
