The GBP/USD Ranges After Rate Decision
- The GBP/USD continues to range after BOE decision
- Range resistance is found at 1.4431
- SSI reads at an extreme +2.74
(Created using Marketscope 2.0 Charts)
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The GBP/USD continues trade in a 53-pip range despite this morning’s BOE rate decision. Ultimately, the BOE decided to hold rates at 0.50%. While this news did provide some brief volatility for the GBP/USD and other pound crosses, prices for the Cable have ultimately stayed beneath range resistance. This value can be seen above at the R3 pivot point at a price of 1.4431. If prices remain beneath this value, it opens up the market to continue ranging. In this scenario, traders will look for prices to return towards support, which is found at the S3 pivot at a price of 1.4378.
It should be noted that prices have already traversed today’s pivot range once. However, in the event of a breakout, traders should continue to monitor both the R4 and S4 pivots. In a bullish scenario, breakouts may begin if price action trades above R4 pivot point at 1.4457. Conversely, a bearish breakout below support would be denoted by a decline through the S4 pivot point at 1.4351. A move below support would be significant, as prices would be trading back in the direction of the pair’s primary trend. When using a 1-X extension of today’s 53-pip pivot range, potential bearish breakout targets may be found near 1.4404.
SSI (Speculative Sentiment Index) is still holding at an extreme for the GBP/USD, reading at +2.74. With 73% of positioning long the market, this may be taken as a bearish contrarian signal for the pair. Alternatively, if the current downtrend begins to turn, traders will look for SSI to move back from extremes towards a more neutral figure.
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