GBP/USD eases to a low of 1.2978 to start the London morning
The pound is not getting much reprieve as traders continue to be unsure about what to expect from the BOE later today. The OIS market is now pricing in a ~54% probability of the BOE cutting rates later today, up from the ~45% odds earlier in the day.
Cable is now at the lows as price closes in on the week's low @ 1.2975. Further support in the pair is seen closer towards 1.2950-70.
As things stand, it is all about the BOE now for the pound. With rate cut odds pretty much a coin flip, that will potentially give traders a reason to go chasing a big move whichever way the BOE decides to go with.
But things will be made more complicated by their outlook (potentially a one-and-done cut?) and any changes to the policy statement (more dovish shift?).
I'll put up a more comprehensive preview on this later in the day.
Either way, in the bigger picture:
Cable is looking for some form of catalyst to go chasing a break of the narrowing wedge that is being formed now. The BOE could be that catalyst today but it will all depend on their decision and how they choose to communicate it.
For any downside move, further support can be seen closer to 1.2950-70 before moving towards 1.2905-20. Thereafter, the 100-day MA @ 1.2866 will come into play.
As for any upside move, minor resistance is seen closer towards 1.3025-30 before key near-term resistance is seen around 1.3041-56. Thereafter, the 1.3100 level will be one to watch for any potential further upside extension.
