Thursday, September 10, 2015

BOE Data Should Give Direction for gbpusd

Yesterday saw low volatility in gbp/usd. 53 pips is a very low daily range for the pair. You know how volatile cable can get. It means directional move is coming. We have a good catalyst for that and that is Bank of England interest rate decision that is due at 11:00 GMT today. Of course, nobody expects an increase (to say nothing of a cut). If that happened we would probably see a huge gap in price of the exchange rate of the pair. 

However, any bullish or bearish signs in the wording of the statement can send the price to the sky or to hell. You may see from the chart below that resistance starts at 1.5425 that marks the low of the 7th of August. Pound bounced of that level at that point and formed a nice bullish candle. It may play as resistance when the release comes out. Intra day support is at 1.5338 (today low). 

Next level of support would be 1.5300 area and resistance would be around 1.5490-1.5500 area. If 1.5490 is overcome the door to 1.5800 (the high of 25th of August) would open up. Bias is slightly bullish right now. 

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