The British pound (GBP) has been down with just about every other currency not named the US dollar of late, though it looks like it is poised for a rebound. There is a lot of data due out this week for the UK, including the Bank of England interest rate policy decision on Thursday.
Th emarket expectati0n at this point is that the BOE will not lower interest rates but that they may increse the size of their bond purchases. This form of quantitative easing could help support the weakening economy without adding significantly to the infaltionary picture. So I think a lot of this sentiment is already baked in to current prices.
But what happens if the data improves ahead of the BOE of rate policy meeting? Well it looks that may be occurring already, as this morning home prices while lower did no fall as last month. In addition, PMI figures came in better than expected at 51.1 vs. an expected 48.5.
The big new however will be on Wednesday, when GDP figures are due out. Should they come in better than expected, then the BOE may not change anything, which could cause the Pound to rise. If this is the case, then 1.575 is the target. Short-term support support is at the daily S2 pivot at 1,546.