The BoE Withholds Volatility, What to Do With Primed Pound?
- The BoE reiterated its views on policy, downgraded its GDP outlook and used the Quarterly report to warn on Brexit
- As noteworthy as the UK event risk was, it didn't surprise many traders and the Pound failed to force breaks
- While the fundamental leverage has passed, there is still trade opportunity in the impressive GBP technicals
In yesterday's strategy video, we discussed the incredible opportunity in the convergence of loaded technical patterns among the Pound crosses and the BoE's quarterly rate decision. The event itself fell well short of an effective spark for the big trade setups the ideal scenarios promised. Yet, does that mean these still-inspiring technical bearings no longer present opportunity for traders to tap? Absolutely not. Patterns like the GBPUSD's slow turn off its 100-day moving average, EURGBP's tight range and GBPAUD's clashing trend channels will inevitable render a market decision. However, we need to put these price patterns into the context of market conditions. Fundamental pressure will ease for the Sterling and the convergence of rate bearings will make a pair like the Cable a slower moving candidate. Stronger and vague cross winds from risk will make present a persistent threat to GBPJPY and the commodity currency pairings. With broader financial conditions still constrained, short-term opportunities with clear technicals and a trail in the 'path of least resistance' will represent better alignment. We review how to follow strong trade opportunities when one of the prime factors passes in today's Strategy Video.
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.