Sterling Remains Volatile Ahead of BOE’s Interest Rate Decision, 50+ PIP Volatility Likely; June 24, 2021
U.K. BOE’s Interest Rate Decision
The key event from the U.K. will be BOE’s Monetary Policy Statement and Official Bank Rate Decision. Short term interest rates are the paramount factor in currency valuation – traders look at most other indicators merely to predict how rates will change in the future. In other side, Monetary Policy Summary is among the primary tools the MPC uses to communicate with investors about monetary policy. It contains the outcome of their vote on interest rates and other policy measures, along with commentary about the economic conditions that influenced their votes. Most importantly, it discusses the economic outlook and offers clues on the outcome of future votes.
Bank of England has reduced the Asset purchase facility at a very initial stage but delayed unlocked and mixed economic data provide uncertainty among the investors. Recently U.K.’s manufacturing PMI index dropped to 64.2 from 65.6 while the services index hit 61.7, down from 62.9. If the BOE suggests that further moves could be possible, GBP could extend its gains. If they repeat the past statements and emphasize the on economic indicators, GBP could fall quickly.
Let’s see how GBP has reacted during the previous data release:
- The Sterling moves in rigid boundaries ahead of BOE’s Interest Rate Decision.
- The pair made intraday high at $1.3974 and low at $1.3948 mark.
- A day chart is bearish while H1 chart with triple EMA suggests up trend for the time being.
- A sustained close above $1.3976 on H1 chart will check key resistances.
- Alternatively, a consistent close below $1.3927 will check further supports.
Take a look and do trade wisely!