GBP/USD Attempts To Breakout Ahead Of More BoE Rhetoric

GBP/USD preserves the recent series of higher highs & lows as Bank of England (BoE) Deputy Governor Sir David Ramsden now sees a ‘case for rates rising somewhat sooner rather than somewhat later,’ and the pound-dollar exchange rate may stay bid ahead of the next interest rate decision on March 22 as the central bank appears to be on track to further normalize monetary policy over the coming months.

It seems as though the BoE is ramping up its efforts to prepare U.K. households and businesses for higher borrowing costs as ‘wages are picking up,’ and Governor Mark Carney may strike a similar tone as the central bank head is scheduled to speak at the Scottish Economic Conference on tap for later this week. Keep in mind, the Monetary Policy Committee (MPC) may ultimately wait until the next quarterly meeting in May to deliver another 25bp rate-hike as the central bank presents its updated inflation report, but the ongoing shift in the monetary policy outlook may fuel the broader shift in GBP/USD behavior especially as the pair appears to be breaking out of a near-term holding pattern.

GBP/USD carves a bullish sequence after failing to test the February-low (1.3765), and the pair may stage a more meaningful advance over the coming days as both price and the Relative Strength Index (RSI) threaten the bearish formations carried over from earlier this year.

GBP/USD Daily Chart