Cable is holding withing a narrow range on Thursday, following strong three-day advance as investors await the outcome of BoE policy meeting.
The central bank is expected to leave its interest rate at a record low, but investors will focus on BoE’s stance against rising inflation.
The consumer prices rose above the central bank’s 2% target and threaten of further rise, driven by accelerating recovery of the Britain’s economy, but the BoE still sees faster price growth as transitory.
Investors expect MPC member Haldane to vote again for reducing central bank’s 895 billion pounds bond buying program and will watch to see if any other member of the Monetary Policy Committee will join him that would boost optimism and support pound.
On the other side, repeated dovish stance would cool down the expectations for early policy changes and increase pressure on pound.
Daily technical studies remain bearishly aligned despite recent strong rise, as momentum remains firmly in the negative territory and daily Tenkan-sen / Kijun-sen are in bearish setup, while recovery action showed signs of stall at key 1.40 barrier (daily cloud top / psychological).
Expect fresh direction signals on break of either 1.4000/17 upper pivots or 1.3944/00 lower triggers.
Res: 1.3982, 1.4000, 1.4017, 1.4072.
Sup: 1.3944, 1.3900, 1.3860, 1.3800.
