Cable is holding within narrow range in early Thursday and awaiting the outcome of Bank of England MPC’s monetary policy meeting.
The pound ended trading on Wednesday in red, after being hit by overall weak UK jobs data, with additional pressure coming from stronger dollar which was boosted by signs that President Trump’s tax plan was gaining momentum. Today’s focus is at BoE, with central bank widely expected to keep interest rate and QE unchanged (0.25% and 435billion pounds respectively).
Markets will be closely watching for the rhetoric of the MPC, as BoE is expected to keep the story about interest rate hike alive and also focus on today’s voting configuration.
The nine-member UK MPC is expected to vote 7-2 for rate hike, but surprise on hawkish shift on 6-3 voting configuration is also on the table.
This scenario would be supportive for pound and could spark stronger bullish acceleration towards target at 1.3473 (weekly cloud top).
On the other side, more dovish tone from BoE would weaken pound and risk bearish acceleration towards strong support at 1.3070 (daily cloud top).
Res: 1.3268, 1.3300, 1.3328, 1.3385
Sup: 1.3198, 1.3158, 1.3112, 1.3070