Today’s BoE meeting is, as new BoE Chief Economist Huw Pill described, “live” and “finely balanced”. There is a thin majority of economists expecting no change. But market pricing suggests that a hike is not really a surprise. But in either case, the new economic projections, as well as voting would more likely be the things that move markets.
Here are some previews:
- BOE Preview – Rate Hike Cycle to Begin?
- BoE To Hike Rates, Pave Way For Big Central Banks, But Will Pound Follow?
- BoE Preview: Rate Hike Imminent?
Sterling is generally soft ahead of BoE’ rate decision. GBP/CHF broke through 1.2467 support this week and resumed the whole decline from 1.3070. For now the structure of the fall suggests that it’s corrective in nature. Hence, even in case of deeper decline, we’d expect strong support from 1.2259 to contain downside and bring rebound.
Nevertheless, while break of 1.2541 minor resistance will bring recovery, break of 1.2759 resistance is needed to signal a near term bullish reversal. Otherwise, outlook will be neutral at best.
