Mark Carney fueled markets last Thursday by creating flames to rise to heights not seen since his predecessor Mervyn King was at the helm of the BOE. Last weeks’ super Thursday started as expected when the chair announced to no surprise, that rates were to be left unchanged at 0.75%. He then went on to announce growth forecasts were to be revised to 1.2% which is the lowest level since the financial crisis. Not stopping there this Tuesday while speaking in a town hall attended by business leaders in London he continued, stating what many fear, that a no-deal Brexit, essentially would spell chaos for global markets.
Although the BOE have lit the fire on what is already a volcanic hotseat for the government, Tuesday also saw the government announce it had agreed a post-brexit trade deal with Switzerland, which led to a rally in the pound. This rally saw the long-term floor price of $1.28 in GBPUSD held after threatening to breakout last week.
Now that this has been held, the question this week is can the recent short-term ascending triangle continue and spark a bull run toward the $1.32? Many believe this may be short lived, as tensions mount each day that passes with dimmed lights of optimism preventing markets to gain clear sight and move forward from these volatile times.
As of now, the volatility is positioned to continued and with UK CPI numbers out on Wednesday morning, seeing how the confidence of consumers currently stands will likely be a trigger for further runs in cable as the exit countdown edges closer.
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