Bank of England in its Monetary Policy Committee has decided to keep interest rates unchanged. Also, the Committee voted to reduce government bond purchases, reducing purchases by 100 billion pounds over the next 12-month period.
On the GBP/USD charts, these events are reflected by major volatility. However, by the end of Thursday, the situation appeared clear. USA is cutting - Dollar is heading down. UK is keeping rates high - GBP is heading up. From a technical perspective, the rate is facing a resistance zone at 1.3300/1.3315.
Economic Calendar
On Friday, watch the Japanese Yen during the Asian session. The Bank of Japan is expected to announce its monetary policy. Despite the BoJ Policy Rate being forecast to remain unchanged, markets might move due to comments from the central bankers.
The BoJ does not give a predetermined time for its announcements, as it wants to avoid unnecessary speculation from market participants.
GBP/USD hourly chart analysis
A bounce off from the zone could look for support in the 1.3260/1.3265 range, the weekly R2 simple pivot point at 1.3249, the 1.3220/1.3230 zone and the ascending 50 and 100-hour simple moving averages.On the other hand, a surge would have to break the 1.3300 level and the surrounding range. Higher above, note the weekly R3 simple pivot point at 1.3340. Even higher, note the 1.3400 and 1.3500 levels.
Hourly Chart
GBP/USD daily candle chart analysis
On the daily candle chart, the rate has broken the resistance of the August high levels. The broken range could turn into support.Read More: Technical Analysis
Traders remain short
On Monday, trader open position volume showed that 72% of trader open positions were short.
Meanwhile, pending orders 100-points around the rate were 59% to buy.
On Thursday, traders were 73% short, but pending orders were 71% to buy. It appears that traders still expect a decline, but have set up close by buy orders.
Meanwhile, pending orders 100-points around the rate were 59% to buy.
On Thursday, traders were 73% short, but pending orders were 71% to buy. It appears that traders still expect a decline, but have set up close by buy orders.