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Where will Cable be after the BOE?

This pair is closing in on a key support area, and I’m looking to catch a bounce to nearby resistance levels.

Before moving on, ICYMI, today’s Asia-London session watchlist checked out the selloff on EUR/USD after the FOMC decision. Be sure to check out if it’s still a valid 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:

  • BOE monetary policy decision, MPC minutes at 11:00 am GMT
  • Canadian retail sales at 12:30 pm GMT
  • U.S. Markit flash manufacturing and services PMIs at 1:45 pm GMT
  • Eurozone consumer confidence at 2:00 pm GMT
  • U.S. CB leading index at 2:00 pm GMT
  • U.S. natural gas storage at 2:30 pm GMT
  • New Zealand trade balance at 10:45 pm GMT

If you’re not familiar with the forex market’s main trading sessions, check out our Forex Market Hours tool.

What to Watch: GBP/USD

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

Who’s ready to trade the BOE decision?

I’m keeping close tabs on this descending triangle support on Cable, as the pair might be in for a big move during the central bank announcement.

No actual monetary policy changes are expected for the time being, but I’m sure pound traders are keeping their ears peeled for any shift in tone.

Keep in mind that a lone wolf voted to reduce total asset purchases in their earlier decision, so more hawkish votes this time might bring strong bullish vibes for Cable.

After all, U.K. inflation has been heating up over the past months, prompting policymakers to consider tightening monetary policy sooner.

Meanwhile, the Greenback enjoyed some support from the FOMC announcement on starting their own taper before the year ends. The dot plot forecast of rate changes also signaled a likely hike around mid-2022.

If support holds, Cable could recover to the triangle resistance at 1.3800 or at least until the nearby upside barriers around the 1.3700-1.3750 area of interest.

Technical indications are looking mixed, though, as the 100 SMA is below the 200 SMA but Stochastic is turning higher.

In any case, make sure you practice proper risk management when trading the news!