GBP hit after BoE remarks

GBP is sold across the board after BoE remarks that reducing interest rates on reserves is being considered. GBPUSD is down from 1.6661 to 1.6413, EURGBP is up from 8771 to 8895. On the news front: GBP CPI was higher than expected (1.6% yoy vs. 1.4%). German ZEW disappointed at 87.7 vs. exp. 59.9. US retail sales and PPI came up better than expected at 1.1% vs 0.4% core and 1.7% vs. exp 0.9%.

USDCAD turned around little earlier than expected and reached only 0871 before dropping 100 points. EURCAD behaved more predictably. As assumed yesterday, it reached a high of 5880 before dropping to 5740!!! That's the power of trendlines on the daily chart.

Given the significant move in GBPUSD and the underlying reason for the move the trading plan will be to sell GBPUSD on strength. Selling a test of 10 hour ema (currently at 6490) with a stop above 20 h ema advised.