Important events today:

7:00 UTC – GB: inflation for January.

13:30 UTC – US: retail sales for January.

A decline in quotations to the nearest support levels is advisable to use for opening Buy positions for two reasons. Firstly, today the UK national statistics office will release the inflation release for January and we can expect a decrease in the indicator, which is favorable for the pound’s strengthening. Money supply in Britain has sharply decreased, which together with a decline in fuel prices allows us to expect a decrease in the consumer price index. The Bank of England had earlier signaled that inflation would peak at 11%, the level we saw in October.

Secondly, yesterday the OPEC cartel presented its latest global oil market report, which indicated the imbalance between the supply and demand, which was expected to amount to 250 000 barrels per day by the end of Q1, due to increased demand in China and reduced output in Russia. This is a positive signal for oil prices, which will also provide additional support to the pound, as assets are correlated with each other.

Recommendations: Buy 1.2125/1.2085 and TP 1.2215.