Following on from the rejection of the 2019 low at 1.20230 GBP has corrected back up to our resistance trend line, now rejecting and creating some consolidation on higher time frames with a triangle pattern being formed on the 4hr , we now have a slightly sideways market following the EMA on the 4hr TF.
Signs of both a reversal from the support and a break and retest are present, we'll need to await the BoE rate announcements which will give more clarity as to which direction GBP is pushing. With the 2 previous BoE rate being neutral and remaining the same we'll wait and see what tomorrow, Thursday 30th brings as we have the next MPC announcement taking place.
If we have an unexpected rate cut we could see GBPUSD fall below our support and come back up for a retest after volatility has calmed down, at which point we can expect the market to confirm change in trend direction from the 4hr uptrend to a steeper and more aggressive down trend which give us long term opportunity trades to the lower key levels previously mentioned at 1.20230.
If rates are hiked we can expect the rejection from our triangle support level and some bullish momentum towards our resistance in which case we can look for the confirmation for the short term long opportunity.
Signs of both a reversal from the support and a break and retest are present, we'll need to await the BoE rate announcements which will give more clarity as to which direction GBP is pushing. With the 2 previous BoE rate being neutral and remaining the same we'll wait and see what tomorrow, Thursday 30th brings as we have the next MPC announcement taking place.
If we have an unexpected rate cut we could see GBPUSD fall below our support and come back up for a retest after volatility has calmed down, at which point we can expect the market to confirm change in trend direction from the 4hr uptrend to a steeper and more aggressive down trend which give us long term opportunity trades to the lower key levels previously mentioned at 1.20230.
If rates are hiked we can expect the rejection from our triangle support level and some bullish momentum towards our resistance in which case we can look for the confirmation for the short term long opportunity.
Comment:
As you can see following the BoE's latest MPC vote, the Bank rates stayed the same. Unexpected as economic data points build up would suggest a cut was more likely. As the no change vote was unexpected we saw a huge soar from GBP, breaking from the smaller consolidative phase on our support on the wedge. Now approaching the wedge resistance. Expect some pull backs and consolidation as institutions and fund managers get out of this trade, it will cause a less liquid area within the market. This decision to keep rates the same is more than likely in order to give the pound some strength going into tomorrow's possible no deal Brexit.
Comment:
Currently still bullish after BoE rate announcement, now breaking through the wedge resistance level with no signs of deceleration or rejection, after Brexit confirmation today at 11pm we should see continuation towards the higher TF key resistance levels.