Pound Upside Potential Increases With BoE Hold
Continuing to add to my short GBP/USD position with breaks below 1.5500 and at 1.5344-50.0% Fibo of 1.3648-1.704 proved profitable as the pair would fall to a low of 1.4783. I took profits following the retracement back above the 61.8% Fibo at 1.4952 as the solid support level and looming BoE rate decision limited further profit potential. We are currently see a continuation of the retracement as the BoE remained on hold, but the relief rally isn’t formulating as the lack of a statement from policy officials has markets guessing. The upcoming release of the minutes may prove more market moving and I would wait to take any new positions until then. Another break below the 61.8% Fibo level could entice me into another short position, but I would need to have some supporting evidence to believe that another bearish trend has developed. Upside potential may be greater if the central bank signals that they will bring an end to their QE efforts.
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.