7 Aug 2013
GBP/USD below 1.5300, eyes on BoE
FXstreet.com (Edinburgh) -The sterling is rapidly losing ground against the greenback on Wednesday, with the GBP/USD trading in sub-1.5300 levels ahead of the BoE Quarterly Inflation Report.
GBP/USD remains vulnerable
The pound looks set to suffer from the expected dovish tone from Governor M.Carney. Market consensus expects the BoE to announce further details on the implementation of forward guidance and/or the adoption of specific thresholds to determine the UK monetary policy. According to Jane Foley, Strategist at Rabobank, “The majority of other G10 central banks keep forward guidance simple and briefly describe what is expected for the path of official interest rates. We expect the BoE to follow this example… A dovish presentation by the BoE today risks pushing cable back below the GBP/USD1.5303 100 day sma and potential back towards the GBP/USD1.5270 area”.
GBP/USD levels to watch
At the moment the pair is down 0.45% at 1.5300 with the next support at 1.5259 (low Aug.5) ahead of 1.5254 (high Jul.31) and then 1.5243 (high Aug.1). On the flip side, a breakout of 1.5332 (low Aug.6) would open the door too 1.5392 (high Aug.6) ahead of 1.5416 (high Jul.26).
GBP/USD remains vulnerable
The pound looks set to suffer from the expected dovish tone from Governor M.Carney. Market consensus expects the BoE to announce further details on the implementation of forward guidance and/or the adoption of specific thresholds to determine the UK monetary policy. According to Jane Foley, Strategist at Rabobank, “The majority of other G10 central banks keep forward guidance simple and briefly describe what is expected for the path of official interest rates. We expect the BoE to follow this example… A dovish presentation by the BoE today risks pushing cable back below the GBP/USD1.5303 100 day sma and potential back towards the GBP/USD1.5270 area”.
GBP/USD levels to watch
At the moment the pair is down 0.45% at 1.5300 with the next support at 1.5259 (low Aug.5) ahead of 1.5254 (high Jul.31) and then 1.5243 (high Aug.1). On the flip side, a breakout of 1.5332 (low Aug.6) would open the door too 1.5392 (high Aug.6) ahead of 1.5416 (high Jul.26).