GBP Awaits Bank of England Verdict: Volatility Ahead?
GBP/USD
In the first half of the current trading week, the GBP/USD pair has confidently stayed above the significant range of 1.2700-1.2650, continuously attempting to resume its upward trend. Today, everything could change. Depending on the outcome of the Bank of England meeting and the market's reaction to the officials' decision, the pair could either strengthen to 1.2860 or fall to 1.2600. Additionally, we cannot rule out the possibility of the pair continuing its sideways movement, which it has been in for over four weeks.
What do experts expect from today's Bank of England meeting:
- The interest rate is expected to remain at 5.25%.
- The number of votes for a rate cut is expected to be 2, and for the rate to remain unchanged, 7.
Therefore, if any officials change their stance and the current balance shifts dramatically, volatility in the pound could sharply increase.
According to the technical analysis of the GBP/USD pair on the daily timeframe, we observe a sluggish formation of the "piercing candle" pattern. If the pair remains above 1.2700, the price may retest 1.2860-1.2800. In the case of breaking the support at 1.2660, a resumption of the downward trend towards 1.2600-1.2540 is possible.
Read analytical UK interest rate forecasts for 2024 and beyond.
USD/JPY
Dollar buyers in the USD/JPY pair are persistently attempting to stay above 158.00. The ultra-loose policy of the Bank of Japan and the hawkish stance of the Federal Reserve may contribute to another approach to the psychological level of 160.00.
According to the technical analysis of the USD/JPY pair, we observe a strong upward trend across all higher timeframes. On the D1 chart, after a corrective pullback at the beginning of the month, a "bullish engulfing" pattern was formed. If the pair's buyers manage to hold above 158.00, another approach to 160.00 is possible. In the event of a break below the support at 157.60, a short-term downward correction may begin.
The following news could impact the pair's pricing:
- Today at 15:30 (GMT +3:00) the Philadelphia Fed Manufacturing Index (USA) for June.
- Today at 15:30 (GMT +3:00) the number of initial jobless claims in the USA.
- Tomorrow at 02:30 (GMT +3:00) the nationwide core Consumer Price Index (CPI) in Japan for May.
Read more: https://fxopen.com/blog/en/ru-gbp-awaits-bank-of-england-verdict-volatility-ahead/
Text source: Forex Trading Blog
