Cable is holding within 1.2900/87 congestion for the third day, awaiting the outcome from BoE’s super Thursday on policy decision and inflation report.
Markets are widely expected the central bank to stay unchanged today, but focus will turn on the minutes of the previous meeting. Lat time, one MPC member voted for rate hike towards the end of the year and markets will be closely watching for today’s minutes’ numbers.
If number of voters for early rate hike increases that would be good support for the pound.
Inflation remains steady above 2% and unemployment is holding ant multi-year lows, which are supportive factors.
On the other side GDP fell below expectations in Q1 that weighs on sentiment.
Traders are also focusing on the press conference of BoE’s Governor Carney for more hints.
From the technical point of view, cable remains bullish overall, with recent dips being contained by daily Tenkan-sen line (1.2908) which marks initial support.
Strong indecision was signaled by long shadows of past two days’ candles, as the pair faced strong headwinds at psychological 1.3000 barrier.
Indication of fresh downside comes from daily RSI and slow stochastic that turned south after touching overbought zone boundary.
Initial bearish signal could be expected on loss of 1.2900 handle which may trigger bearish acceleration towards next pivots at 1.2830 (04 May trough) and 1.2750 (Fibo 38.2% of 1.2363/1.2986 rally).
Alternative scenario needs sustained break through 1.3000 barrier for attack at next strong barrier at 1.3088 (base of falling weekly Ichimoku cloud).
Res: 1.3000, 1.3050, 1.3088, 1.3146
Sup: 1.2900, 1.2830, 1.2770, 1.2750