Global macro overview for 17/10/2016:

In his latest comments in the BBC Radio interview, Bank of England Deputy Governor Ben Broadbent said the UK inflation will likely to rise even above 2% over the two-year period. Moreover, he added: "Having a flexible currency is an extremely important thing, especially in an environment when your economy faces shocks that are different from your trading partners", which was clearly related to Brexit and the consequences for the financial markets. In conclusion, Broadbent is rather optimistic when he speaks about the inflation target as it seems to be quite overshoot. It has been years now when BoE was trying to increase the inflation target over 2%, but so far they were a mile away from reaching this level and there is no reason why this time it is different.

Let's now take a look at the GBP/USD technical picture in the hourly time frame. The market still trades in a narrow horizontal zone, just below all moving averages and the bigger time frame outlook supports the bearish view. The next support is seen at the level of 1.2087 and the next resistnace is seen at the level of 1.2273.