Technical analysis and trading recommendations - https://fxpcm.com/en/fx/gbpusd-important-uk-macro-data-published-week-18072016
In response, the Bank of England's decision to keep interest rates in the UK at the current level of 0.5% GBP / USD pair jumped 330 points. Despite the subsequent statement of the Bank of England that "most of the members of the committee expect easing in August," the pair closed the trading day with a gain of nearly 200 points.
Such a decision of the Bank of England surprised the financial markets, it is expected that the Bank of England cut rates after the vote for access to the UK from the EU.
On Friday in the GBP / USD pair has been observed the converse downward movement, especially intensified after the release of positive data from the US and the statements of the Bank of England representative Andy Haldane that "significant" policy easing will be needed in August.
Over the same positive-than-expected data on US retail sales and industrial production, published last Friday, contribute to the strengthening of the US dollar and the revival of the market's expectations of what the US rate will still be raised this year.
Thus, according to futures on a bet the Fed, the probability of a rate hike in September is already 18%, although still in the middle of last week, it was 12%. The probability of a rate hike rose to 40% from 34% in December.
Many economists expect that in August the Bank of England cut interest rates by 25 basis points, to 0.25%, as well as increase the quantitative easing program at 100 billion pounds to 475 billion pounds.
If published tomorrow (CPI CPI) and Friday (PMI, or purchasing managers PMI) will show "signs of weakness", the expectations of monetary easing by the Bank of England on August 4 increase. This will put downward pressure on the pound and a pair GBP / USD.
In this case, we can expect the return pair GBP / USD to the 1.3000 level while maintaining the downward dynamics in the steam and increasing downside risks to the levels of 31 years ago marks near 1.2900, 1.2800.
Expectations of easing monetary policy in the UK, the uncertainty of the future prospects of the economy on Brexit background will restrain the pound from further strengthening.