The pound is flirting with daily lows and monthly lows as the US dollar strengthens across the board.
GBPUSD 4 hours
This four hour chart looks like a head and shoulders which would target 1.23 or at least the November lows.
The Bank of England vote today was more dovish than expected but the market is still pricing in only 54 bps in discounting next year. I think the UK CPI reports in the coming months will be some of the most market moving of any global economic data to be released next year. There is real concern about inflation at BOE but if that goes away, they have a lot of room to cut, and fast.
The latest move however is about the dollar as it strengthens due to a moderate bounce back from risk assets. The dollar is also getting heavy bids through USD/JPY which is very high today after the BOJ left rates on hold.
