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Who’s up for trading the BOE decision today?

I’m keeping close tabs on this triangle consolidation setup on Cable that could be due for a breakout soon.

Before moving on, ICYMI, today’s Daily Asia-London Session Watchlist looked at a potential consolidation break on EUR/GBP before the BOE decision. Be sure to check that out to see if there is still a potential play!

And now for the headlines that rocked the markets in the last trading sessions:

Fresh Market Headlines & Economic Data:

Upcoming Potential Catalysts on the Economic Calendar:

What to Watch: GBP/USD

GBP/USD 1-hour Forex Chart
GBP/USD 1-hour Forex Chart

Cable formed lower highs and found support at 1.3825, creating a descending triangle on its 1-hour chart.

The pair is chillin’ right at the top of the triangle, still deciding whether to make a bounce or a break.

Are sellers about to take over or will pound bulls keep charging?

This could all boil down to the upcoming BOE statement, as the central bank is widely expected to sound a bit more optimistic this time. Although no actual changes to interest rates are eyed, some predict that MPC members could agree to start tapering weekly gilt purchases.

If that’s the case, GBP/USD could surge past the triangle resistance and rally by the same height as the chart pattern, which spans around 175 pips.

Technical indicators, however, are hinting that resistance might hold. The 100 SMA just crossed below the 200 SMA while Stochastic is heading south to reflect the presence of selling pressure.

Keep in mind that the possibility of tapering may already be priced in ahead of the actual central bank decision, so we might see some profit-taking action during the announcement. Besides, there’s also the possibility that the BOE could disappoint and refrain from tapering for now!

In any case, brace yourselves for additional volatility during the top-tier event and make sure you practice good risk management. Don’t forget that the local elections in Scotland might cause some big moves as well.