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BOE Rate Cut Won’t Matter, EUR/USD Likely To Break Lower

Published 14/07/2016, 08:01
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Paul Rodriguez from Think Trading states the Bank of England is likely to cut rates tomorrow, but believes it would be symbolic in nature and would lack substance. Rodriguez also presents his view on FX pairs – GBP/EUR, EUR/USD and VIX.

Key quotes

UK stock markets see stress in different areas, anything that sells in dollars is doing well

Very good chance we are going to get a rate cut tomorrow

The best thing would be to get the rate cut out of the way post which FTSE would fall, sterling could rally following a bout of consolidation

VIX is a buy here going into the summer months

GBP/EUR – seen consolidating in the range of 1.155-1.19 followed by a rally. ‘Sterling shall last as a currency, EUR won’t’

EUR/USD – Long period of sideways action, waiting for a breakout, US dollar could go up anyway irrespective of Fed rate hike/cut. Expecting a bearish break in the pair

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