So the final couple of days of the week are upon us and market participants have been waiting for them with lots of excitement and anxiety as they pretty much guarantee fresh developments and attractive price action. As we’ve mentioned multiple times in our previous reports this week traders are focused on today’s and tomorrow’s events as they’re looking to find out more about the outlook of the US Dollar and the British Pound.
Starting with today’s events, it’s the first time in history that the Bank of England will release on the same day their monetary policy decision, the minutes from the meeting that will take that decision and the Quarterly Inflation Report. On top of that Governor Carney will be hosting a press conference after the release of the data above so volatility and price action are expected to be elevated as everyone will be focused on the Pound. Analysts are already calling today as the “Super Thursday” illustrating how important this day could be.
We’re mostly interest to see how the Monetary Policy Committee will vote in regards to raising their interest rates and how bullish its members are over the outlook of the domestic economy. Definitely the release of the meeting’s minutes immediately and not 2 weeks later as usual and the press conference that will follow will allow us critical insight on what the policymakers are thinking.
The Cable will of course be on the forefront of attention and the technical outlook of the currency pair illustrates that traders are waiting on today’s events to either propel it higher or send towards its previous lows. The Cable is trading just above 1.5600 this morning having tested the support of this key area yesterday and should the news reveal a bullish bias among the MPC then the rally should drive the currency towards the 1.5700 area and possibly above. On the other hand, a more reserved approach and doubts on whether a higher interest rate policy is needed should put the Cable under pressure with the 1.5500 lows being the target.
The Euro has been trading higher for the past 24 hours testing the 1.0900 resistance area, the recent news from the Eurozone have been mixed and we believe that traders are waiting for the release of the US jobs report tomorrow to spark some price action in the currency. Our bias remains bearish and we could take advantage of this opportunity to sell the Single currency higher with the view that tomorrow’s NFP report will reinvigorate the Dollar rally and send the Euro lower.