- The Bank of England is expected to keep the interest rate unchanged at 0.10%.
- U.S. policymakers are getting much closer to the stimulus, which raised hopes for the U.S. economic recovery.
- Currency trading market participants can buy above 1.3875 to go to $ 1.3985 on Thursday.
During the Asian trading session, the GBP / USD pair widened the bearish bias and remained in the red zone below the 1.3900 level. The strength of the US dollar kept the currency pair under pressure. Due to the support of the uptrend line, the GBP / USD price forecast remains bullish above the 1.3875 level.
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BOE monetary policy report and impact on GBP / USD
Prudent sentiment ahead of the BOE’s monetary policy report keeps the GBP / USD pair under pressure. The BOE is expected to leave its policy unchanged, but the focus will remain on the MPC votes. Perhaps this is why traders did not pay attention to pre-PNF issues, stimulus hopes and positive Brexit headlines.
Dave and Saunders suggest reducing the volume of QE
Dave Ramsden and Michael Saunders, members of the Monetary Policy Committee, called on the bank to end accommodative policies. Ultimately, this caused a cable climb.
Therefore, investors will expect them to vote to support the obvious decision in the vote. Given the increase in the number of COVID-19 cases, slow economic growth and Brexit, the BOE can convey a cautious message in its “Super Thursday”. meeting. It would weigh on the GBP / USD currency pair, but probably not for too long.
Hawkish Vs. Dovish policy: MPC asset purchase mechanism votes
Currently, the vote on the ease of purchase of MPC assets stands at 0-1-8 and economists do not expect changes soon. However, if there are two more votes to end the program (say, by Dave and Saunders), this would be an indication that contractionary policy will arrive earlier than expected.
This will spread hawk feelings in the market and driving strong uptrends in the GBP / USD pair. Conversely, if the vote is 0-1-8 or 0-0-9, it will be considered a impoverished politics and trigger a bearish trend.
Official bank rate – The Bank of England is expected to keep interest rates unchanged at 0.10%. Therefore, the pound sterling may present a slight upward bias against the US dollar.
Basic principles affecting cable (GBP / USD)
At a particular time, the GBP / USD is trading at 1.3908 and consolidating between 1.3873 and 1.3909. Cable’s bearish bias could also be attributed to the pace of the Delta’s covid tension spreading in the UK. In contrast, the latest optimism on the Brexit issue is considered essential, while maintaining coverage of additional GBP / USD losses.
Coronavirus concerns weigh on the pound sterling Price forecast
Despite the geopolitical outbreak and the worldwide coronavirus outbreak, market sentiment expanded its previous positive behavior and remained well-supplied throughout the day. However, hopes for the passage of infrastructure spending by U.S. President Joe Biden played a major role in supporting the trading state of the market.
The US dollar brings a combined sentiment: GBP / USD Trade Choppy
According to reports, U.S. policymakers advanced in the stimulus talks. It raised hopes about the American economic recovery and contributed to the gains in market trading sentiment. On top of that, the disconcerting statements of the US Federal Reserve favor pressure on the GBP / USD pair.
Fed Vice President Richard Clarida said the condition is expected to be reached for an interest rate hike in late 2022. The market is laying the groundwork for a move in early 2023 He added, in addition, this step for the purchase of reduced bonds later this year or earlier, depending on the performance of the labor market. However, the prevailing bullish bias around market sentiment did not provide any solid support for the GBP / USD currency pair.
On the front of the US dollar, the powerful US dollar extended its bullish performance in the early days. It remained well-offered on the same day, as investors applauded the fallacious statements of the US Federal Reserve. In contrast, the global mood of the market is considered significant fundamentals that support the US dollar of safe haven. Therefore, the rises of the US dollar kept the GBP / USD currency pair under pressure.
Today, investors will keep an eye on the BOE’s monetary policy report, U.S. employment claims and the Fed. Commercial, political and virus headlines will also affect markets.
GBP / USD price forecast: daily support and resistance
Pivot point 1,391
GBP / USD Price Forecast: Daily Technical Analysis: Rising Triangle Support 1.3875
The GBP / USD price forecast remains bullish above the 1.3875 level; however, investors remain out of the market ahead of major developments. Traders await the political meeting of the Bank of England and the decision on the interest rate. Before that, they try to save their bets from firing at the same time after posting the political decision.
In the 4-hour chart, the cable has formed a double-bottomed pattern that supports it at around 1.3785. At the same level, the uptrend also extends so that it increases the chances of an uptrend to the pound sterling.
The cable can have immediate resistance at 1.3950 and 1.3985 levels. However, the formation of descending triangle patterns is spreading fear to a bearish break. This is because these types of patterns usually break at the bottom.
The 50 day EMA (exponential moving average – red line) will extend an immediate hurdle to the 1.3915 level. Bullish growth above 50 EMA may drive the GBP / USD price towards 1.3985.
From the leading indicator, stochastic CSR is trading at 18.66 and is out of the oversold zone. The odds of a bullish investment are solid.
He Currency trading market participants can buy above 1.3875 to go to $ 1.3985 on Thursday. By contrast, the sell stop may be below the $ 1.3860 level to reach the current $ 1.3800 and 1.3737. All the best!
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