The decline in the GBP / USD pair was more than expected yesterday. Today, in the UK, very important news events are expected that can significantly affect market sentiment and on the eve of these events, investors quite logically chose to get rid of the British currency and of course refrained from opening new long positions.
Key events should begin at 15:00 Moscow time, when the Bank of England will submit its report on inflation and the decision on the interest rate will be announced. The market does not expect a change in the interest rate at the current meeting, since by and large the regulator has no reason to do so now. Since the last meeting, data from the UK showed a moderate deterioration in the situation in all sectors of the country’s economy. Therefore, the market reaction will directly depend on the comments that the heads of the Bank of England will give, assessing the current situation in the economy, prospects for its further development, assessment of the inflation situation, as well as prospects and approximate dates for the next rate increase in the current year. It is almost impossible to predict the price movement in such a situation, therefore we are watching the news feed.
Technical situation is still fully controlled by the sellers. Price broke through support at 1.3980 and entrenched below it continued its downward movement. The next support for the price is in the area of 1.3660, but rather this is a medium-term goal, not a short-term one. There are no serious signals to turn up the price at the moment, so the conclusion is unequivocal in favor of lowering quotations.
Review prepared by Fort Financial Services Research Department. Follow our publications!