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The BOE is up in a few hours! Check out why the central bank event could set EUR/GBP up for a potential trend continuation.

Currency Snapshot:

Asian Session Performance of Major Pairs from MarketMilk
Asian Session Performance of Major Pairs from MarketMilk

Fresh Market Headlines & Economic Data:

Upcoming Potential Catalysts on the Forex Calendar:

  • Germany’s industrial production at 7:00 am GMT
  • Switzerland’s foreign currency reserves at 8:00 am GMT
  • ECB’s economic bulletin at 9:00 am GMT
  • Italy’s retail sales at 9:00 am GMT
  • European Commission’s quarterly economic forecasts at 10:00 am GMT
  • BOE’s monetary policy decision and report at 12:00 pm GMT
  • Mark Carney’s presser at 12:30 pm GMT
  • U.S. unemployment claims at 1:30 pm GMT

What to Watch: EUR/GBP

EUR/GBP 1-Hour Forex Chart
EUR/GBP 1-Hour Forex Chart

The biggest data release on today’s London session docket is the Bank of England (BOE)’s monetary policy decision. Analysts see Governor Carney and his team maintaining their current 0.75% interest rates.

However, they also expect central bank members to downgrade their growth and inflation forecasts in their quarterly monetary policy report as they consider a weaker labor market, souring investor sentiment, and the economic impact of Brexit AND election-related uncertainties.

EUR/GBP is consolidating just above the .8600 handle that lines up with a 50% Fibonacci retracement on the 1-hour time frame.

If Carney and his team signal enough dovishness to hint at rate cuts in 2020, then we could see EUR/GBP pop up to the .6825 levels closer to the 61.8% Fib and the descending channel resistance.

Watch how the pair reacts to the level to see if you’ll need to use a trend play or an upside breakout strategy.

EURGBP Volatility Profile from MarketMillk
EURGBP Volatility Profile from MarketMillk

For the past 30 days, EUR/GBP typically sees its most volatile day on Thursdays. Specifically, it tends to move by more than 80 pips during the day. Make sure you place your stops beyond that if you’re planning on trading the BOE’s event.