Today it would be a hectic day for the Bank of England as it has to deliver two important policy decisions, MPC minutes and the Inflation Report. In between, the central bank will likely keep interest rates at 0.5%.

Technical watch:

We observe GBP with its major currency counterparts has been underperformer from last couple of trading sessions, GBPJPY dropped almost 2.25% from the highs of 175.011 to 171.011 (yesterday's lows), GBPUSD slid around 0.57% to the current flashes at 1.4577, GBPCAD dropped 1.37% during the early European trading sessions.

Emphasizing ore on GBP/CAD, it has failed to hold onto the crucial resistance yesterday at 2.0292 that it would now be projected as failure upswings and may head towards more price declines since various bearish indications.

A sharp "Gravestone Doji" candle pattern appeared at peaks of 2.0133 on monthly charts that has more bearish potential which is yet to evidence the dips.

Consistent convergence of leading oscillator (RSI) to sideway to slightly downward trend has been observed when prices were rallying at peaks no momentum is seen, instead volumes were raising on price declines, this would be also treated as the upswings were losing momentum while selling interest is seen in this pair.

In addition to that %D line crossover on slow stochastic above 80 levels on monthly charts which is again an overbought region. Thus, we look ahead at price to test the support at 1.9999 and then 1.9798.

Aggressive speculators can build trades with the spreads using one touch GBPCAD vega binary put options which are constant time and barrier levels. Usually, such binary options for every change in 1 pip the relative change in option price 0.01% or even exponential at high implied volatility times.

We believe one touch vega spreads can be the best suitable options to trade HY vols, GBPCAD 1D ATM options are currently trading with 25% IVs. The prime merits of such one touch option spreads are high yields during high volatility plays. Wider spreads indicate lack of liquidity.