The Bank of England (BOE) is up today!
Will the central bankers’ decisions push the pound higher?
I’m looking at GBP/USD’s pullback for opportunities today.
In a few hours, the Bank of England (BOE) will publish its monetary policy decisions for June.
Recall that Governor Bailey and his team turned hawkish when they said that asset purchase could be “slowed somewhat” after seeing the U.K.’s economic recovery trajectory.
But that was last month. Since then, COVID-19 cases had gone up enough that the government had postponed the easing of lockdown restrictions by a couple more weeks. Economic releases have also been spotty with PMIs disappointing even as retail activity in the hospitality industry improved.
If BOE’s Monetary Policy Committee (MPC) members sprinkle cautious remarks on their statement, GBP/USD could extend its weeks-long weakness against the dollar.Cable could find resistance at the 38.2% Fib retracement of the last downswing and pound bears could take cues from the SMA crossover on the 4-hour chart.
But if MPC members focus on easing lockdown restrictions, or if their votes hint that they could taper or tighten in the foreseeable future, then the pound could gain more ground against the dollar.
I’ll watch out for GBP/USD making new highs, which could gain enough bullish momentum to push GBP to that 1.4100 area closer to the SMAs and broken trend line support.
What do you think? Is GBP/USD a buy or sell? Can the pound gain more pips against the dollar this week? Or are we looking at the best place to short the pound for a swing trade?
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