HomeContributorsFundamental AnalysisSterling On The Cusp Of A Pullback Ahead Of BoE Decision

Sterling On The Cusp Of A Pullback Ahead Of BoE Decision

The price of crude oil rose in the overnight session as sentiment in the market improved. Traders also reacted to the latest data by the Energy Information Administration (EIA), which showed that inventories fell by more than 994k barrels last week. Economists were expecting the inventories to rise by 446k barrels. Earlier on, data by the American Petroleum Institute showed that inventories fell by more than 5 million barrels.

The British pound wavered in the overnight session as traders waited for the first interest rate decision by the Bank of England (BOE). Economists believe that the bank will leave interest rates and the quantitative easing policy unchanged. They also expect the statement by the bank’s governor to be dovish. For example, the governor could warn of the likelihood of negative interest rates in the attempt to depreciate the sterling.

The Australian dollar rose against the greenback after mixed trade numbers from Australia. In total, Australian exports increased by about 3% in December while imports fell by 2%. Imports had risen by 10% in November. As a result, the country’s trade surplus widened from A$5 billion to about A$6.8 billion in December. The data came a day before the statistics bureau released its retail sales data.

EUR/USD

The EUR/USD price dropped to a low of 1.200 after the US and EU services PMI numbers. On the four-hour chart, the price dropped below the middle line of the Bollinger Bands. It is above the 50% Fibonacci retracement level. Also, it is below the 25-day and 50-day exponential moving averages (EMA) while the Relative Strength Index (RSI) has moved close to the oversold level. Therefore, the pair will likely remain in this range ahead of the important US jobless claims numbers.

GBP/USD

The GBP/USD price is on the verge of a bearish breakout ahead of the Bank of England (BOE) interest rate decision. The pair is trading at 1.3622, which is slightly below the important support at 1.3635. On the four-hour chart, the 25-day and 15-day EMAs have also made a bearish breakout while the signal and main line of the MACD have moved below the neutral line. Therefore, the pair will likely break-out lower today.

BTC/USD

The BTC/USD soared to an intraday high of $38353 as part of a global rally in crypto prices. It then pulled-back and is trading at $37,750. On the hourly chart, the price rose above the 25-day and 15-day moving average and the parabolic SAR. Also, the moving average of oscillator has moved above the neutral line. Therefore, the pair will likely continue rising as bulls attempt to retest the important resistance at $40,000.

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