The GBPUSD pair is ready for the US elections and the Bank of England’s decision that follows two days after the vote in America. If we look at the price action on the pair since the March meltdown, we see a one-way street – higher.
So far, the higher highs and higher lows series held pretty well on the GBPUSD pair. In fact, the pair managed to put a spectacular comeback above the 1.30 level after trading as low as 1.15 in March.
Will the rising trend continue after the US elections? How about the Bank of England’s new easing measures expected? Are they enough to trigger a GBPUSD bearish price action?
No Important Economic Events This Week
It appears that this week the price action is likely to remain in the rising channel. With literally no important economic event out of the United Kingdom, the market will focus on the US elections.
Even the few pieces of economic data out of the United States will not move the market. Investors wait and see the outcome of the elections and then decide the implications for the USD.
One should not discard the Bank of England’s decision. On the one hand, the market expects the bank will announce an increase in the quantitative easing program. On the other hand, the decision comes one day after the Fed’s decision and two days after the US elections. Moreover, the NFP follows one day after the Bank of England makes the announcement.
Effectively, it means that the volatility remains low this week. However, it will increase dramatically next week.
GBPUSD Technical Levels to Consider
Firstly, as long as the pair remains inside the rising channel, a bullish bias persists. Only a drop below 1.28 will shift the bias from bullish to bearish.
Secondly, 1.30 remains pivotal. In fact, the chances are that the GBPUSD enters the big US event with values around 1.30. The explanation is that the round numbers are often used in algorithmic trading to range trade ahead of important market events.
Therefore, bulls should focus on the price staying inside the rising channel. And, above the 1.30. Bears, o the other hand, should watch a break below 1.28. If and when it comes, it signals that the rising trend started in March is over.