The cable rose by 450 pips at the beginning of the week amid the global USD selloff. However, the pound’s rally was capped by the BOE meeting on Thursday: the bank left rates unchanged and revised the economic forecasts to the downside. The market is no longer expecting a rate hike in 2016.
From the technical viewpoint, the cable is now testing the trend line support at 1.4500. This is also 38.2% Fibonacci from the December-January decline. Pay attention to the “doji” candle formed on Friday – it signals that the market has formed a local top at 1.4665.
UK economic calendar is going to be rather light next week. December trade balance will be published on Tuesday and On Wednesday, watch the manufacturing production data.