GBPUSD Jan 27 to Jan 31 Outlook

Recap
As mentioned last week, Y-1 rejected points to down trend invalidated. So this week we got a run back up to Y+1 to see if the other boundary can be taken out. It did. Breakout play pointed to Y+2 and we got that. Funny how BOE chief can just turn the whole thing around suddenly. Closed the week below Y+1 and midpoint.

Outlook
I mentioned last week to expect “wide range consolidation”. We got it. Although how it ended was very dramatic, it is not unexpected that BOE would do something to contain Cable from going higher. This type of actions will continue for at least several months as central bankers duel it out.

This week as B+1 is rejected decisively, cable will be forced to consolidate around Y+1 / B-0. Normal situation it will be capped within Y+2 and Y-0 with decreased range.