British Pound Sterling needs a fourth dissenter

On Tuesday August 11, the British Pound Sterling traded at 1.3500, slightly down from the session's start and within a narrow 25 pip range. The currency's value has risen by about two cents since the beginning of the month, without any domestically significant releases to explain the increase. The upcoming week will need to determine the reason behind this fluctuation.

Two of the three releases expected to impact the Pound are American, while the third is a British growth report expected to show slower growth. The only positive development for the Pound in the past six weeks has been a vote count, which gave the Bank of England a 5-3 decision to keep interest rates at 3.75%.

This trend has been consistent over the past year, with the number of dissenters growing from one in April to three in July. A fifth dissenter would secure a 5-4 vote, while two more would allow the committee to make the decision. The next meeting is scheduled for September 17, shortly after the Federal Reserve meeting.

The argument for a quarter-point increase is based more on energy than domestic demand. June's Consumer Price Index (CPI) was 2.6% YoY, with core inflation at the same rate and services at 3.6%, both lower than the spring. The ongoing war has also impacted oil prices, which remain constrained by the maritime embargo against Saudi shipping. The dissenters are voting on a growth picture that continues to stall.

The current economic data, including the upcoming American CPI release on August 12 and the British GDP and industrial production reports on August 13, will determine the Pound's direction. Resistance lies at the mid-July peak of 1.3550, with a daily close above this level potentially pushing the price to 1.3600. Support is found at 1.3450, with the 50-day and 200-day Exponential Moving Averages (EMA) lines converging near 1.3400. A daily close below 1.3400 would invalidate this prediction and reopen the 1.3300 level.