News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
EUR/USD
Bearish
Oil - US Crude
Bearish
Wall Street
Bullish
Gold
Mixed
GBP/USD
Mixed
USD/JPY
Bullish
More View more
Real Time News
  • $AUDJPY poised to move higher after finding support at the 200-day moving average. $CADJPY eyeing a push back towards the yearly high $EURJPY perched atop key support after breaking below Rising Wedge support. Are further losses in the offing? $JPY https://www.dailyfx.com/forex/market_alert/2020/09/28/Japanese-Yen-Outlook-AUDJPY-CADJPY-EURJPY-Levels-To-Watch-.html?CHID=9&QPID=917708&utm_source=Twitter&utm_medium=Moss&utm_campaign=twr https://t.co/v03Ge14yvW
  • Gold price vs. US Dollar Index (DXY) -52 weeks https://t.co/VuZTTnNxmm
  • Join @ZabelinDimitri 's #webinar at 11:30 PM ET/3:30 AM GMT to find out how geopolitical risk will affect the markets in the week ahead. Register here: https://t.co/hsULxMNOtM https://t.co/26Vn8xNZHF
  • Commodities Update: As of 02:00, these are your best and worst performers based on the London trading schedule: Gold: -0.02% Silver: -0.10% Oil - US Crude: -0.24% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/k82jSelAG3
  • The US Dollar continues to show tones of reversal as Q3 winds down. Can buyers drive the currency through the Q4 open? Get your #currencies update from @JStanleyFX here: https://t.co/mnVvIOhtay https://t.co/H5xQXSalBf
  • Forex Update: As of 02:00, these are your best and worst performers based on the London trading schedule: 🇦🇺AUD: 0.43% 🇳🇿NZD: 0.20% 🇬🇧GBP: 0.18% 🇨🇦CAD: 0.03% 🇪🇺EUR: 0.02% 🇨🇭CHF: 0.01% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/TtUEpT5jDK
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 96.63%, while traders in EUR/GBP are at opposite extremes with 64.46%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/uxUVKs9BeK
  • 10 out of 11 S&P 500 sectors ended higher on Friday, with half of the companies in the green. Information technology (+1.63%), consumer discretionary (+1.44%), utilities (+1.12%) were among the best performing ones, whereas energy (-0.26%) lagged. https://www.dailyfx.com/forex/market_alert/2020/09/28/Nasdaq-100-Futures-Extend-Gains-Hang-Seng-and-Nifty-50-May-Rebound.html https://t.co/eIecw9NQQD
  • The Hang Seng Index (HSI) has likely formed a bullish “AB=CD” pattern, with the “D” point found at around 23,080. A rebound from the “D” point may lead to more gains with an eye at 23,760 and then 24,200. https://t.co/ObmqqYa5P4
  • Wall Street Futures Update: Dow Jones (+0.39%) S&P 500 (+0.33%) Nasdaq 100 (+0.30%) [delayed] -BBG
GBP/USD to Threaten Bearish Momentum on Hawkish BoE- 1.6300 Up Next?

GBP/USD to Threaten Bearish Momentum on Hawkish BoE- 1.6300 Up Next?

2014-10-09 07:00:00
David Song, Shuyang Ren,
Share:

- Bank of England (BoE) Widely Expected to Retain Current Monetary Policy.

- Will We Continue to See a 7-2 Split Within the Monetary Policy Committee (MPC)?

For more updates, sign up for David's e-mail distribution list.

Trading the News: Bank of England (BoE) Interest Rate Decision

The Bank of England (BoE) interest rate decision may generate a further decline in the GBP/USD should the central bank refrain from releasing a policy statement and make further attempts to buy more time.

What’s Expected:

GBP/USD BoE

Click Here for the DailyFX Calendar

Why Is This Event Important:

It seems as though we will continue to see a 7-2 split within the Monetary Policy Committee (MPC) as the majority remains reluctant to normalize monetary policy, and the bearish sentiment surrounding the British Pound may gather pace over the remainder of the year unless we see a more hawkish twist to the forward-guidance for monetary policy.

Expectations: Bearish Argument/Scenario

Release

Expected

Actual

Nationwide Home Price Index n.s.a. (YoY) (SEP)

10.4%

9.4%

Industrial Production (MoM) (AUG)

0.0%

0.0%

Mortgage Approvals (AUG)

65.0K

64.2K

Slowing outputs and easing home prices may push the majority to maintain the highly accommodative policy stance well into 2015, and the GBP/USD may continue to give back the advance from July 2013 should Governor Mark Carney talk down bets for higher borrowing costs.

Risk: Bullish Argument/Scenario

Release

Expected

Actual

Gross Domestic Product (2Q F)

0.8%

0.9%

Jobless Claims Change (AUG)

-30.0K

-37.2K

Consumer Price Index Core (YoY) (AUG)

1.8%

1.9%

Nevertheless, sticky inflation paired with expectations for a faster recovery may prompt the BoE to shift gears sooner rather than later, and the GBP/USD may break out of the near-term bearish trend should the central bank adopt a more hawkish tone for monetary policy.

Join DailyFX on Demand for Real-Time SSI Updates!

How To Trade This Event Risk(Video)

Bearish GBP Trade: No Policy Statement & More of the Same from BoE

  • Need red, five-minute candle following the decision to consider a short GBP/USD trade
  • If market reaction favors selling Cable, short GBP/USD with two separate position
  • Set stop at the near-by swing high/reasonable distance from entry; look for at least 1:1 risk-to-reward
  • Move stop to entry on remaining position once initial target is hit, set reasonable limit

Bullish GBP Trade: MPC Shows Greater Willingness to Normalize Policy

  • Need green, five-minute candle to favor a long GBP/USD trade
  • Implement same setup as the bearish sterling trade, just in opposite direction

Read More:

EUR/USD at Risk for Larger Recovery as ECB Buys Time, SSI FlipsEURUSD October Opening Range Setup- 1.27 Key Resistance

Potential Price Targets For The Release

GBP/USD Daily Chart

GBP/USD Daily Chart

Chart - Created Using FXCM Marketscope 2.0

  • Need a break of the bearish RSI momentum carried over from July to favor topside targets
  • Interim Resistance: 1.6280 (38.2% retracement) to 1.6300 (50.0% retracement)
  • Interim Support: 1.5890 (61.8% retracement) to 1.5900 (50.0% expansion)

Impact that the BoE rate decision has had on GBP during the last meeting

Period

Data Released

Estimate

Actual

Pips Change

(1 Hour post event )

Pips Change

(End of Day post event)

SEP 2014

09/04/2014 11:00 GMT

0.50%

0.50%

-19

-137

September 2014 Bank of England (BoE) Interest Rate Decision

GBP/USD to Threaten Bearish Momentum on Hawkish BoE- 1.6300 Up Next?

As expected, the Bank of England (BOE) maintained its highly accommodative policy stance in September, with the central bank keeping the benchmark interest rate at 0.50% while retaining the asset purchase facility at 375B. Moreover, the Monetary Policy Committee (MPC) once again refrained from releasing a policy statement and provided little evidence for a material shift in the policy outlook. Despite the muted market reaction, the GBP/USD lost ground during the North American trade, with the pair closing the day at 1.6309.

--- Written by David Song, Currency Analyst and Shuyang Ren

To contact David, e-mail dsong@dailyfx.com. Follow me on Twitter at @DavidJSong.

To be added to David's e-mail distribution list, please follow this link.

Trade Alongsidethe DailyFX Team on DailyFX on Demand

Looking to use the DailyFX Trade Signals LIVE? Check out Mirror Trader.

New to FX? Watch this Video

Join us to discuss the outlook for the major currencies on the DailyFXForums

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES