GBP/USD
Expectations for the Bank of England's decision on monetary policy that was held on Thursday kept the British pound from noticeable movements on Wednesday.
Technically, the price is ready to decline, this is indicated by the consolidation of the price under the trend line of the Kruzenshtern and even if it is weak, but the reversal of the signal line of the Marlin oscillator before the border with the growth zone. The goal of the decline is the trend line (1.3014), the breakout of which opens a further path to 1.2800. But everything will be decided after the statement Of the Bank of England at the rate (14:00 GMT).
The general expectation of the market is a rate increase from 0.50% to 0.75%. External and internal economic conditions, including, of course, the risk of the UK leaving the EU without a trade deal, clearly indicate the prematurity of such expectations. The only reason why the BoE may decide to raise the rate is because it is constantly being reproached by the investment community in slowing down, delaying such an increase.
As the main scenario, we accept that the regulator will keep the policy unchanged. In this case, we are waiting for the price of 1.2800 for a few days.
In the event of rate increases the magnitude of the growth rates is difficult to determine. Suspect persistent publication in the business media that, say, the rate increase has already been taken into account by the market and the growth may be small and short-lived. A look at the falling pound chart since mid-April does not give place to such an idea about the consideration of the price rate increase. Perhaps, in case of a rate hike, the pound will be sold by strategic investors. It remains to wait for developments.
The material has been provided by InstaForex Company - www.instaforex.com