The British pound has been all over the place during trading on Thursday as the week Monetary Policy Committee voted on whether or not have an interest rate cut. While the actual decision wasn’t a huge surprise, the reality is that most people expected a unanimous vote to keep interest rates where they were. However, there were two members of the MPC that voted to cut rates. This shows a potential divergence of monetary policy which of course has the attention of traders around the world. Ultimately, the market fell to the most recent support, and then bounced from there.
GBP/USD Video 08.11.19
While interest-rate cuts would of course cause issues for the value of the British pound, the reality is that nobody cares about interest rates at this point and it’s all about Brexit. There has been some headway made into Brexit and it looks as if a “no deal Brexit” isn’t going to happen in the short term, so that’s most of with the market cares about. With that being said it’s likely that we will bounce from here and go looking towards the 1.30 level for resistance yet again ultimately, a break above that level opens up the door to the 1.33 handle, which is an area of major noise and trade flow. After that, the next target would be the 1.38 handle based upon the pole of the bullish flag that the market is currently making. At this point, buying the dips still continues to work regardless of what the Bank of England says.
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This article was originally posted on FX Empire
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