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GBP/USD – Steady after uneventful BoE

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BoE – Not one for the highlight reel

Super Thursday was certainly not the best description of today’s events at the Bank of England, but let’s face it, it was never going to be.

These quarterly events are often at least one of the highlights of the week, with there being an interest rate decision, new economic projections and a press conference with the Governor and his colleagues. But with the UK being three months from potentially exiting the EU without a deal, the BoEs hands were tied and their forecasts borderline useless.

Apart from reassure everyone of their readiness to act in the worst case, no-deal scenario, there isn’t much they could offer. There’s no incentive to cut rates at the moment as the economy is doing alright and much of the data is supportive of higher rates, not lower.

GBPUSD Daily Chart

 

Given what the Bank has had to contend with over the last few years, this has probably been one of the more pleasant quarterly events and that could not have been more reflected in the markets where the pound barely budged.

And if that wasn’t enough, the point at which the press officer was basically begging for more questions perfectly summed the afternoon up.

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The pound was quite steady throughout which isn’t surprising given the lack of fireworks. It’s finding some support around 1.21 which was similarly supportive last time it traded around these levels in early 2017. We are starting to see some momentum disappearing on the 4-hour chart which, given how far we’ve fallen, may offer time for some reprieve.

GBPUSD 4-Hour Chart

That said, this is Brexit and part of the pound’s volatility stems from the unpredictability of it. Another weekend of no-deal Brexit PR offensives could knock confidence again and see the pair hurtling towards 1.20.

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Craig Erlam

Craig Erlam

Former Senior Market Analyst, UK & EMEA at OANDA
Based in London, Craig Erlam joined OANDA in 2015 as a market analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary.

His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and SKY News.

Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.
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