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Talking Points:

- GBPJPY, GBPUSD see key reversals on H4, daily charts.

- EURGBP sees inverse H&S, GBPCHF sees H&S...hmmm.

- Have a bullish (or bearish) bias on the British Pound, but don’t know which pair to use? Use a GBP currency basket.

Today's a big day for the British Pound. The Bank of England's Quarterly Inflation Report (QIR) took on a tone decidedly more dovish than the market had anticipated, leading to the biggest volume day (thus far) in GBPUSD on FXCM trading platforms in all of 2014:

Time to Sell GBP: BoE's QIR Spurs Key Reversals on Big Volume

Download the FXCM Volume Indicator

There are two aspects to this report that we care about. First, the reason for the major surge in GBPUSD trading volume and associated crumble in the pair. Our best guess is that the BoE's slice in half of Q4 wage growth expectations would be the main culprit, followed by the shift in the BoE's projected natural rate of unemployment to 5.5% from 6-6.5%.

Both of these developments cater to the BoE staying in an accommodative policy stance than otherwise thought; without wage growth, gains in inflation will be hard to sustain - especially as the current unemployment rate (6.5%) sits a whole point above the BoE's preferred rate (5.5%).

The second aspect of the BoE's QIR that we care about is the technical impact being levied on the GBP-crosses. In particular, there are a significant number of GBP-bearish key reversals developing across the spectrum, including in GBPCHF, GBPJPY, and GBPUSD. See the video above for the technical outlooks.

Read more: Waiting on EUR/USD, USD/CHF Flags to Break

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