-1683717374.png)
BOE Outlook
GBPUSD is holding near recent highs today ahead of the BOE meeting tomorrow. The BOE is widely expected to hike rates a further .25% on the back of recent CPI data which showed inflation remained above 10% last month. With a rate hike well-expected, the focus will be on the new forward guidance issued by the bank.
Market Expectations
The market is turning increasingly hawkish on the BOE, expecting the bank to press ahead with further tightening beyond this month. However, the bank itself has been steadily warning past tightening is largely yet to feed through into the economy. As such, the bank noted that further tightening will depend on the path of inflation. With inflation still above 10% the bank is likely to retain a more hawkish outlook for now, keeping GBP supported near-term.
Near-Term GBP Focus
Given the BOE’s concerns over the lag from prior tightening, the message Is likely to be fairly similar to last time around with the bank linking any further actions to the trajectory of inflation. As such, GBP is likely to stay well bid after the meeting as traders keep their current expectations intact. The BRC retail monitor this week came in above forecasts suggesting that price pressures likely persisted this month. As such, the greater volatility is likely to be found around the next UK CPI release.
Technical Views
GBPUSD
The rally in GBPUSD has seen the pair breaking out above the bull channel, trading up to a test of the 1.2659 level where the market is currently stalled. While above the 1.2437 level the focus is on a continued move higher and a breakout towards the 1.2992 level next.
.png)
Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.
Past performance is not indicative of future results.
High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% and 75% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Futures and Options: Trading futures and options on margin carries a high degree of risk and may result in losses exceeding your initial investment. These products are not suitable for all investors. Ensure you fully understand the risks and take appropriate care to manage your risk.
With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.