BOE Meeting in Focus
GBPUSD is on watch today as traders brace for the latest BOE rate setting meeting. While no cut is expected traders will be paying close attention to the latest outlook and guidance from the bank as the market looks to gauge the likelihood of a BOE rate cut over Q3. Stickiness in UK inflation this week has fuelled an uptick in uncertainty with traders scaling back August rate-cut projections. However, September is still seen as a viable option for a cut.
BOE Expectations & GBP Impact
If the BOE leans to the dovish side in its messaging today, GBP is vulnerable to a fresh drop lower as traders raise expectations for a Q3 cut. Given the strength in USD this week as a result of increased safe-haven demand, GBPUSD could move down firmly in this scenario. On the other hand, if the BOE is seen taking a more neutral, or slightly hawkish tone, particularly with any clear pushback against rate cut expectations, this could fuel a fresh rally in GBP. In this scenario, GBPUSD should recover some ground though with the bigger market focus on the Israel-Iran conflict, upside could prove limited. If the US does go ahead with an airstrike on Iran, this could send USD sharply higher near-term as risk aversion sweeps markets, adding further pressure for GBP.
Technical Views
GBPUSD
The sell of fin GBPUSD has seen the market breaking below the rising trend line with price now testing below 1.3436 too. With momentum studies bearish, focus is on a test of deeper support at the 1.3285 level and bull channel lows. This is a key pivot for the market with bulls needing to defend this region to keep the bull trend intact.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.