Cable Nosedives As BoE Eases Monetary Policy

The Great Britain Pound (GBP) fell sharply against the US Dollar (USD) on Thursday, dragging the price of GBPUSD to less than 1.3150 amid the Bank of England (BoE) monetary policy announcement. The technical bias already remains bearish because of a Lower Low in the recent downside move.

Technical Analysis

As of this writing, the pair is being traded near 1.3126. A support may be noted around 1.3100-1.3102, the intraday low of yesterday ahead of 1.3057, a key horizontal support and then 1.2796-1.2800, the confluence of a psychological number as well as the swing low of the latest major upside rally as demonstrated in the given below daily chart.

On the upside, the pair is likely to face a hurdle near 1.3345, the high of yesterday ahead of 1.3371, the high of recent upside wave and then 1.3477, the confluence of a major horizontal resistance as well as the swing high of latest major upside rally. The technical bias will remain bearish as long as the 1.3477 resistance area is intact.

BoE Eases

The Bank of England cut its benchmark interest rate to the lowest in its 322-year history and revived a financial crisis-era bond-buying program to cushion the U.K. economy from the aftershocks of the vote to leave the European Union. The package’s aspects didn’t gain unanimous support from the rate-setting Monetary Policy Committee, reflecting caution among some officials that the trickle of economic data since the vote didn’t yet justify such a broad response.

Trade Idea

Considering the overall technical and fundamental outlook, selling the pair on short-term rallies appears to be a good strategy in short to medium term.

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Usman Ahmed

Usman Ahmed is an individual forex trader and market analyst. He holds a Masters of Business Administration (MBA) degree. His work includes fundamental and technical reports on various currency pairs, commodity futures and stock markets. His technical analysis features price action strategies.

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