Hi, friends!
Today I’m looking to catch a few pips from GBP/USD during the BOE’s policy statement.
Will Governor Bailey encourage pound-buying? Or will GBP/USD give in to a key range resistance?
Check out this chart I’m looking at:
In case you missed it, Fed Governor Powell did a pretty good job of reassuring markets that he and his team would still push the pedal to the metal even though they believe that “strong data are ahead of us.”
The optimism dragged the safe-haven dollar a bit and pushed higher-yielding bets higher.
Too bad that the pound didn’t see much of the optimism!
See, GBP/USD still got rejected just under the big 1.4000 and now the bears have another reason to short ahead and during the Bank of England (BOE)’s policy decision.Word around is that Governor Bailey and his team are planning to keep their policies steady. They might even try to pull a Fed in reassuring that they won’t take away the easy policies despite strong economic data!
If the BOE successfully communicates its intent to keep the stimulus juice flowing, then GBP/USD could break above the 1.4000 range resistance.
MarketMilk tells me that GBP/USD moves by an average of 91 pips on Thursdays so I think I can aim for the 1.4050 – 1.4075 zone in case the pair breaks higher.
If the BOE emphasizes the economy’s downside risks, though, or if traders don’t believe that at least some members are already thinking about tapering their easy policies, then GBP/USD could extend its losses below 1.4000.
The 1.3900 zone is an area to target for the bears since it lines up with the mid-range support AND the SMAs on the 1-hour time frame.
What do you think? Which way will GBP/USD go today?
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