It looks set to be a busy day for FX traders today as they have two major central bank rate calls to negotiate in the London trading session. The Bank of England’s call will come hard and fast on the back of the SNB and will also provide a good trading opportunity for traders despite the fact that they are fully expected to keep rates on hold. The devil, as always, will be in the detail, but with the last couple of inflation prints coming in relatively hot, it is unlikely that the MPC will cut today, there could however, be some changes in the voting and forward guidance and that is likely to lead to volatility in the market.
The pound is now trading over 1% lower than its recent high against the greenback and any more dovish leaning in the MPC voting or the message that we get from Andrew Baily and co., could see it challenge the trendline support around 1.2680 and the recent lows near 1.2650. Conversely, a more hawkish tone and Cable should rally back into recent ranges with 1.2850 the initial target.
Resistance 2: 1.2893 – 2024 High
Resistance 1: 1.2680 – Trendline Resistance and June High
Support 1: 1.2682 – Trendline Support
Support 2: 1.2654 – June Lows
