The cross rises through initial barriers after split MPC vote hurt sterling
The cross retested highs of past few days at 0.8646 (reinforced by falling 20DMA) on fresh bullish acceleration on surprise BoE MPC split vote (7-2 vs 9-0 f/c) on previous policy meeting, report showed today.
Sterling came under fresh pressure on announcement and fell against its major counterparts, as the first non-unanimous interest rate vote in more than one year signals different views of UK policymakers and signals that more MPC members may join in rate vote for rate cut in 19 Dec BoE’s next policy meeting.
Fresh advance brings the cross’ price in the upper part of 0.8574/0.8675, three-week congestion, which was so far capped by rising 200WMA (0.8658).
Rising bullish momentum and north-heading stochastic on daily chart support recovery which needs to break above 200WMA and congestion top to signal base formation and expose next pivotal barriers at 0.8745/69 (Fibo 38.2% of 0.9019/0.8574 / falling 10WMA).
Caution on conflicting weekly studies (rising bearish momentum / stochastics’ bullish divergence) which may limit recovery on lack of clearer signals.
Res: 0.8658; 0.8679; 0.8725; 0.8744
Sup: 0.8628; 0.8602; 0.8585; 0.8574