GBPUSD could trade lower as the price looks to retrace back to a key support zone. The Bank of England is set to hike interest rates tomorrow, could this add to the downside pressure?
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The GBPUSD could move lower tomorrow after the Bank of England rate announcement. The BoE is expected to raise interest rates by 50bps, with the view to slow down further tightening of monetary policy. The RBA recently announced a similar view which caused the AUD to weaken. Could this happen for the GBP too? If the price were to weaken we could see the price retest the support zone.
Looking at the monthly chart we can see that the GBPUSD price has formed a rejection of the range lows. This could signal a bullish move is to come in the market, if the price was to move higher on this time frame we should see a bullish trend on a lower time frame like the daily chart for example. The daily chart shows the price forming the beginning of a reversal, the inverse head and shoulders pattern completed. This is a sign that the market trend may change, if the price is going to move higher we could expect a move back to the neckline of the pattern for price to form a higher low. If buyers step back in at this support zone we could look for long opportunities.
Did you see our EURUSD Analysis? You can see it here.
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