GBPUSD holds within extended consolidation range; awaiting BoE for fresh direction signal
Cable ticked higher in early European trading on Thursday but remains within four-day range and holds above key support – 200SMA, despite several spikes lower.
Double long-legged Doji in past two days signals strong indecision, which resulted in extended consolidation following steep descend from 1.4376 (2018 high).
Daily techs show mixed signals as MA’s in bearish setup weigh, while momentum and slow stochastic head north.
Basing attempts are evident on daily chart, but the pair was so far unable to break above the upper boundary of near-term consolidation range, reinforced by falling 10SMA (1.3602) and generate initial bullish signal.
Batch of data from the UK is due today, starting with releases of Industrial / Manufacturing Production and trade balance, but all eyes are on BoE’s super Thursday, as the key event for pound today.
The central bank is expected to keep interest rates unchanged, but minutes of the previous meeting are forecasted for a split vote, with focus also on Inflation report and Governor Carney’s speech.
Hawkish tone from BoE would increase expectations for rate hike in August and boost pound, which could result in eventual break above congestion top and spark recovery rally.
Conversely, dovish BoE would sell pound and risk firm break below 200SMA pivot for continuation of downtrend from 1.4376.
Res: 1.3602; 1.3629; 1.3665; 1.3696
Sup: 1.3542; 1.3484; 1.3442; 1.3400