Resilient UK data and hawkish Bank off England expectations, as the U.S.
dollar uptrend stalls, suggest the next stop for the pound could be 1.3788.
Resilient UK data underpins sterling, with GDP growth of 0.4% and industrial production up 0.8% in August, supporting expectations of a BoE rate hike this year nL8N2R912Y, though supply chain issues nL8N2R9165 and high energy costs provide headwinds.
The European Union proposed measures that will slash the paperwork involved in the Northern Ireland protocol on Wednesday, though they fell short of the UK position that the European Court of Justice should not have a role nL1N2R90D5.
Negotiations on this phase of Brexit are set to continue, with a trade war still on the table and the key issues unresolved, but will likely have little short-term impact on the pound.
Technically 5, 10 and 21 day moving averages conflict, while the 21-day Bollinger bands contract - neutral signals that suggest range trading.
Sterling tends to pivot around the 21 DMA, swinging from one Bollinger band to another, as seen repeatedly since July.
The key 21 DMA, which capped GBP/USD on the close recently, gave way on Wednesday, suggesting a test of the falling 1.3788 upper Bollinger band, as seen in the July-August and August-September rebounds.
For more click on FXBUZ
gbp Oct 14 Click here