Pound sterling losing momentum towards 1.4000 ahead of BoE policy meeting

Posted by Adegbotolu Kehinde Erastus -
Scope Markets

The cable unleashed a ferocious bullish move against the dollar after the Fed’s dovish stance at last week’s FOMC press conference. GBPUSD propelled above 1.39000 price which was the near-term resistance level. However, the price failed to approach the 1.4000 psychological level and has rotated lower.

On Thursday, the BoE’s MPC (Monetary Policy Committee) is likely to leave rates unchanged and continue with its asset purchase program with inflation being the major highlight of the event. The latest UK consumer price index report (CPI) was up 0.5% for the month of June. Though the Bank forecast that inflation numbers might overshoot the 3% target as the economy tries to recover from the pandemic by the end of the year, Economist expects the MPC to raise the inflation forecast at Thursday’s meeting.

Looking at the current economic situation in the UK, there are signs of improvement as the number of daily Covid cases has declined and the government already easing off health safety measures, although the delta variant still remains a major threat with a number of new of cases being reported globally.

GBPUSD Technical Outlook

GBPUSD Technical Outlook Scope Markets

In what appears to be a head and shoulder pattern on the daily time frame, price is currently reacting at the right shoulder. A hawkish BoE could send the sterling into ecstasy mode with a price likely to override the 1.4000 price level. However, should the bank decide to take a dovish stance alongside their counterpart (The Feds) then the bears might just be invited for a feast which could see the price slide further towards the descending trendline supporting the price at around 1.36000 since the month of March 2021.

Adegbotolu Kehinde Erastus – Market and Research Analyst

Share this article:

Disclaimer: The article above does not represent investment advice or an investment proposal and should not be acknowledged as so. The information beforehand does not constitute an encouragement to trade, and it does not warrant or foretell the future performance of the markets. The investor remains singly responsible for the risk of their conclusions. The analysis and remark displayed do not involve any consideration of your particular investment goals, economic situations, or requirements.

Funding Methods

Scope Markets
Scope Markets
Scope Markets
Scope Markets
Scope Markets
Scope Markets
Scope Markets
Scope Markets

Awards

Scope Markets
Scope Markets
Scope Markets
Scope Markets

Scope Markets offers institutional and retail trading services to businesses and traders worldwide. Our top management team has more than 20 years of experience in the industry, and we are proud of the solid partnerships we built over the years. Whether it's a business or individual, Scope Markets has a wide range of trading solutions that are compliant, flexible, cost-efficient, innovative, and place the client first.

Contact Us

Registered address:
6160, Park Avenue, Buttonwood Bay, Lower Flat Office Space Front, Belize City, Belize

Email:
customerservice@scopemarkets.com

Tel:
+44 2030 516959

Risk Warning

Please note that forex trading and trading in other leveraged products involves a significant level of risk and is not suitable for all investors. Trading in financial instruments may result in losses as well as profits and your losses can be greater than your initial invested capital. Before undertaking any such transactions, you should ensure that you fully understand the risks involved and seek independent advice if necessary. Please read and ensure you fully understand our Risk Disclosure.

Legal Information

Scope Markets Ltd is a company registered under Belize with Registration Number 145,138. Scope Markets Ltd is authorized and regulated by the International Financial Services Commission of Belize (“IFSC”) under the license numbers 000274/222 and 000274/221. The registered address of Scope Markets Ltd is, 6160, Park Avenue, Buttonwood Bay, Lower Flat Office Space Front, Belize City, Belize.

Restricted Regions

Scope Markets does not offer its services to the residents of certain jurisdictions. Please read carefully our Restricted Countries document.

This website uses cookies to provide you with the very best experience and to know you better. By visiting our website with your browser set to allow cookies, you consent to our use of cookies as described in our Privacy Policy.

© Copyright 2020 Scope Markets. All Rights Reserved.