UK inflation rates remain far above their 2% target but have receded back below the politically sensitive 3% rate. Dealers are nervous that the BOE may not hike rates as aggressively as expected, or at all, listening to some analysts.
Cable has underperformed today, trailing EUR/USD by a wide margin as the USD loses steam across the board today. EUR/GBP has been in a very nice uptrend since bottoming last Wednesday 0.6781, reaching 0.6856 this morning before easing slightly. Hourly uptrend support comes in at 0.6840 now.
Combined with an hourly bottom at 0.6834 this morning in London, it is a sure bet stops are building now in the low 0.6830s. 1.9850 bids are eyed on dips near-term. Small stops were triggered there earlier. Small offers are seen at 1.9880 near-term. GBP/USD topped out at 1.9872 earlier, and trades now at 1.9860.
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