GBPUSD Seesaws Around 1.30 Ahead of The Bank Of England decision
GBPUSD is 0.16% lower at 1.2996 ahead of the Bank of England monetary policy decision. The pair is trading in a narrow trading range as we are heading for an interest rate decision with the odds of a rate cut or no are roughly equal and any outcome will increase the volatility. The Bank of England will also provide the future outlook which will also add to volatility.
Yesterday the Federal Reserve kept interest rates unchanged as widely expected from markets. The FOMC statement added nothing new to the interest rates path and the US dollar was unfazed by the policy meeting. The Coronavirus outbreak added to risks as it is likely to cause disruption in China and globally. Coronavirus spread is a topic the BOE will also discuss today.
GBPUSD is under selling pressure since January 23 as the odds of keeping the rates unchanged dropped to around 50%. The GBPUSD outlook is neutral now as the pair breached below the 50-day moving average.
As we expect high volatility after the BOE decision traders must be very cautious on placing orders before and after the interest rates decision. A rate cut will push GBPUSD lower. On the downside, immediate support for GBPUSD stands at 1.2989 the daily low. More bids might emerge at 1.2953 the low from January 14th. The next support zone for the pair will be met at 1.847 the 100-day moving average.
On the flip side, if the BOE keep rates unchanged you should check the forward guidance for any future signal. First resistance stands at 1.3024 the daily high. If the GBPUSD breaks above the daily top, more offers would be met at 1.3252 the 50-day moving average. Next supply zone will be met at 1.3172 the high from January 24th.