Being a sterling trader, here are the levels I am watching into the Bank of England’s interest rate decision set to be released in 30 minutes. The BoE is expected to leave rates unchanged, but after the Shadow MPC came out with an interest rate hike, an unchanged policy decision may be very bearish for GBP.
After the bullish breakout to 1.6278, cable has been trading bearish since making lower highs and lower lows. Despite that though the pair has been unable to complete the quarter to 1.60 finding considerable support at 1.6030 ahead of the 50% Fibonacci retracement level at 1.6015. 1.6000 is a 61.8% Fibonacci level as well as the bottom of the bid zone in the pair. A break below 1.6000 opens up bearish targets to 1.5950 and 1.5860.
I am still bullish the EURGBP and am watching for a break above 0.8500 or below 0.8470. The former has been signalled by yesterday’s price action that breached the 38.2% Fibonacci retracement level of the recent breakdown to the 0.8390 lows. However, a break below 0.8470 opens up bearish targets at 0.8400 and 0.8390.
Since breaking out from record lows at 1.5136, GBPAUD has been rangebound between 1.6100 and 1.5750. A break of the range is immienent and a central bank announement could be just the catalyst to get prices back trending again.
Remember to trade the reaction, not the headlines. Mind your charts and trade what you see!
