Will GBPUSD prices find their peak here? 🤔 Keep an eye on the upcoming Bank of England rate decision, forecast to hold at 5.25%. With UK inflation on the decline and intriguing trends in the GBP CoT futures report, market dynamics are stirring. Stay tuned! 💼💰 #GBPUSD #BoE #MarketWatch

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WILL GBPUSD PRICES TOP OUT HERE

Market participants will need to pay attention to the upcoming Bank of England rate decision. The UK central bank held rates at 5.25%. The MPC vote changed with the vote to hike to change from 2 to 0 which would potentially signal the end of the tightening cycle in the UK. The United Kingdom inflation rate did fall in Feb to 3.4% continuing to show a decline. A hold makes sense here as BoE continues to target 2% inflation rate.

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Keeping an eye on the GBP CoT futures report reveals some intriguing trends.

As of July 17th, 2023, commercials were notably active in selling GBP futures at a rate not witnessed since July 2014. Despite GBP futures hovering around 1.3000 in July 2023, they dipped close to 1.2000 over an 11-week period.

Currently, we're edging towards a similar scenario with commercial short contracts nearing the lows of July 23. Conversely, non-commercials, often large speculators acting as 'trend followers', have surpassed the highs of July 23.

Historically, this dynamic has hinted at a market top. Notably, price resistance appears at 1.3000, suggesting a potential upward movement before any reversal setups emerge. 

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GBPUSD

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The price on the chart has traded through multiple technical levels and some observations included:

  • Cable prices have fallen today after the announcement, with sellers targeting key lows such as 1.2670.
  • Downside targets could be met from lows at 1.2600 and 1.2550.

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