Good morning Traders!
Today we have the UK Monetary Policy Report Hearings, where the BOE will be providing its inflation and economic outlook to the parliament’s treasury committee.
The Monthly chart of this pair is in a confirmed downtrend, and after a strong selloff to a new Lower Low (which also broke the 2010 lows), buyers have returned into the market, pushing the price up into it’s Moving Average. With the month of December printing a bearish rejection candle, and the month of January an indecision candle, more sellers have returned into this market.
On the Weekly chart, price has been printing a Lower High, and if and when the market will break through the level of around 1.61 it will also be confirming a downtrend on this timeframe.
On the Daily chart we can spot three recent touches around this level, and in each touch the market could not push higher then from the previous touch, thus printing Equal Lows and Lower Highs – a compression of price. I’d like to see another touch at this level for some further price compression, before a potential break. However, if the market will break through this level without another touch, then I’ll be
looking for a decisive close below this level and then a pullback to test this level from