Caught two decent moves on UK’s strong inflation figures

UK’s inflation figures came out to 2.9% beating the 2.8% estimate and previous month’s 2.6% figure. I caught a decent sized move on my EURGBP short trade and also USDJPY long although the latter isn’t relevant to this inflation figures release.

Screen Shot 2017-09-12 at 3.59.57 PM
EURGBP 30-Minute

In my earlier post, I listed shorting this trade as it broke through a key level, paused, and looked to trend lower. With the strong UK release, it gave the pound a significant boost making this pair overall bearish.

I will be looking for an opportunity to scale into this trade once again or a similar GBP pair prior to Thursday’s monetary policy statement. Although I do not expect an actual rate hike, the inflation target is kept at 2% while we are nearing 3%. I expect the meeting minutes will have a more hawkish tone signalling the likeliness to raise rates in the near future. This is something to keep an eye out for this week. I am waiting to see some kind of pull back before re-entering my GBP longs.

For the EURGBP pair specifically, I have marked two potential entry zones as shown below:

Screen Shot 2017-09-12 at 4.12.01 PM
EURGBP 4-Hour

This is based on the 23.6 and 38.2 Fibonacci retracement levels. In the meantime, this pair is expected to remain quiet as no ECB announcements are to be expected.

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