What’s Expected:
Why Is This Event Important:
However, we may see private-sector consumption outpace market
expectations as the Bank of England (BoE) anticipates lower energy
prices to boost disposable incomes, and Governor Mark Carney may
continue to prepare U.K. households and businesses for higher
borrowing-costs as the central bank head turns increasingly upbeat
towards the economy.
Nevertheless, improved confidence paired with the pickup in job/wage
growth may produce a better-than-expected sales report, and a further
improvement in household spending may encourage the BoE to raise the
benchmark interest rate sooner rather than later as heightens the
prospects for a stronger recovery.
How To Trade This Event Risk
Bearish GBP Trade: Private Spending in U.K. Contracts 0.2% or Greater
- Need red, five-minute candle following the release to consider a short British Pound trade
- If market reaction favors short sterling trade, sell GBP/USD with two separate position
- Set stop at the near-by swing high/reasonable distance from entry; look for at least 1:1 risk-to-reward
- Move stop to entry on remaining position once initial target is hit, set reasonable limit
- Need green, five-minute candle to favor a long GBP/USD trade
- Implement same setup as the bearish British Pound trade, just in opposite direction
GBP/USD Daily Chart
- Lack of momentum to preserve the bullish trend in RSI may highlight a near-term top in GBP/USD as it fails to push back above the former support region.
- Interim Resistance: 1.5500 pivot to 1.5520 (38.2% expansion)
- Interim Support: 1.5250 (100% expansion) to 1.5270 (38.2% retracement)
Period | Data Released | Estimate | Actual | Pips Change (1 Hour post event ) | Pips Change (End of Day post event) |
---|---|---|---|---|---|
DEC 2014 | 01/23/2015 9:30 GMT | -0.6% | 0.4% | +12 | +16 |