Could the British Pound explode higher? Sure looks possible.

Rate Alert: British Pound Hits a 23-month High Against Euro 🇬🇧🇪🇺
The British Pound strengthens against the Euro as inflation data puts pressure on the Bank of England to raise interest rates. This is leading investors to speculate rates will be raised sooner than expected. Meanwhile, the Euro takes a hit as Omicron COVID cases rise across Europe.

This gave me reason to peek at the GBPEUR chart which is pretty compelling and signals some potential FX fireworks are looming...

This weekly GBP/EUR chart dates back to Brexit and shows GBP/EUR making it’s 8th attempt at trying to start wiping out the Brexit damage. The yellow line hints that a break of 1.2100 probably has real significance. Could GBP explode higher? It sure looks possible.

What does that mean?

To put this in tangible, real life terms it means:

• The Xe UK staff can start re-thinking about buying that South of France/Italy/Spain vacation/retirement home.

• The English Premiere League teams will probably be able to lure more European footballers to the UK as the pounds strength can beat any EUR denominated salary.

• In Formula 1, the Williams and McClaren teams (if you're watching the Netflix series) can no longer claim they can’t afford to keep up with Mercedes or Ferrari.  

Tomorrow’s EU CPI, UK Retail, and Friday’s Christine Lagarde speech loom large. Should the ECB opt to stay easy with its monetary policies after the CPI and Lagarde’s speech, it may be Look-Out-Above in GBP/EUR! I know FX traders and they smell stop-losses above.

#wishwewerepaidinpounds