By Fast Brokers
The consolidation in the GBP/USD carries on as investors await the monetary policy decision from the BOE today. Though the BOE has little wiggle room as far as its benchmark rate is concerned, investors will be more focused on any hints as to the success rate of quantitative easing thus far. Britain’s economic data has been showing signs of life on all fronts the past couple weeks, preventing any sharp movements to the downside despite the recent selloff in U.S. equities. Therefore, the Cable remains in an advantageous position unless the BOE presents any unexpectedly negative news monetarily. Nevertheless, we expect the positive correlation between the Cable and U.S. equities to hold true. Hence, if the S&P futures happen to tank today, the GBP/USD may be so inclined to follow suit albeit in a less-dramatic fashion. On the other hand, if U.S. equities rally we could see the Cable explode to the upside towards our 2nd tier uptrend line and April highs. We should see volume tail off later today and tomorrow as many traders take a long weekend for the Easter holiday. Fundamentally, we maintain resistance of 1.4730 with additional resistances hanging at 1.4770, 1.4834, 1.4883 and 1.4946. The 1.50 level serves as a key psychological barrier while the 1.45 area acts as a psychological cushion. To the downside, we hold our supports of 1.4676, 1.4612, 1.4571, 1.4538 and 1.4484. The GBP/USD is currently exchanging at 1.4678.
Market Commentary provided by Fast Brokers.
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