GBP traders not liking BOE's "limited and gradual" rhetoric

Author: Justin Low | Category: News

Cable headed back to lows of 1.3413 after the BOE decision

The BOE basically reiterated their stance but it isn't something that screams bullish. Limited and gradual is as close as you will get to a wait-and-see approach.

Meanwhile, talking down GDP as soft based on Q4 indicators doesn't send an optimistic signal as well.

GBP/USD is lower post-BOE, but is hovering around the 1.3424 level - coinciding with the 38.2 retracement level shown on the hourly chart. This is where the pair found some support already today, and if the bears are to take it down, this is a level that they must first break through.

The 200-hour MA (1.3401) and the 50.0 retracement level (1.3385) sits nearby, but at the moment, this is the level we need to break through first.

At 1.3400, I'm sure there'd be buyers waiting to come back in. It's a good psychological level, and sits around the 200-hour MA. That's enough conviction. I'd wait to sell on rallies still though.

Be aware, there's still a EU meeting on Brexit going on over the next two days. Some risk factors there as well. If Davis' earlier farce has thought us anything, is that the sterling could easily be driven by Brexit talks.

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