The GBP/USD currency pair continues to see a lot of noise right around the 1.20 level, an area that has been important multiple times. By hanging around this area, it shows that the market is not quite ready to break down, and therefore it’s likely that we will do more sideways action than anything else. This does make a certain amount of sense as the world is trying to figure out what central banks are going to do.
The Jackson Hole Symposium next week will almost certainly influence the markets as well, as several central bankers around the world will meet and give speeches. The British are now worrying about inflation that is running at over 10% year-over-year, although the Americans are still at 8.5%. This is a market that I think will continue to be very noisy and trying to figure out who’s going to be the more hawkish of the two.