GBP's Stability and Outlook: BoE Meeting and Economic Shifts
On Monday, the British Pound remained relatively stable, continuing its sideways trend throughout October as it awaited the Bank of England's upcoming monetary policy meeting.??
Recent shifts in risk appetite have disadvantaged the Pound in currency markets. Forecasts indicate that interest rates will likely remain unchanged on Thursday, with greater attention turning to the economic outlook in light of a series of weak UK economic data since the September meeting. This data suggests sluggish economic activity, further reinforcing market expectations of the BoE maintaining interest rates.??
Some analysts speculate that the Bank of England may have reached the peak of its rate-tightening cycle, making clear communication a critical factor in evaluating the likelihood of a more dovish stance in future meetings.?
The Pound has been on a downward trajectory since late July, and October has been characterised by a persistent struggle to breach the monthly support level of $1.2075, which it briefly touched last Wednesday but failed to surpass. Additionally, the bearish crossover on October 17 of the 50-day and 200-day moving averages, currently at $1.2327 and $1.2435, respectively, underscores the Pound's overall downward trend.?
?
The market is also eagerly awaiting the outcome of the impending US interest rate decision, which is expected to influence the Pound's performance, along with the upcoming NFP data on Friday. Should the Pound strengthen in the coming weeks, it will face resistance at the upper boundary of the bearish channel it has been trading within since July. Furthermore, the 50-day and 200-day moving averages will act as significant resistance levels for the Pound. On the downside, the $1.2075 monthly support continues to prevent further depreciation of GBP; however, if this level is breached, the next support is likely to be near the weekly level of $1.1778.?
Please note that this analysis is provided for informational purposes only and should not be considered as investment advice.
Taurex is the trading name of Zenfinex Global Limited, Stochastic Africa SL Ltd, Zenfinex Global LLC, and Zenfinex Limited.
Zenfinex Global Limited is registered in the Republic of Seychelles with registration number: 8428731-1 and is regulated by the Financial Services Authority of Seychelles (license number SD092). Its registered office address is F20, 1st Floor, Eden Plaza, Eden Island, Seychelles.
Stochastic Africa (SL) Limited is a company registered in Sierra Leone with Company Number: SL270319STOCH05271 and is licensed by the Bank of Sierra Leone under license number BSL/SAL/2023 and with the registered office at 148D Wilkinson Road, Freetown, Sierra Leone.
Zenfinex Global LLC is a company registered with the Financial Services Authority in Saint Vincent and the Grenadines under registered number 138 LLC 2019. Its registered office is Hinds Building, Kingstown, Saint Vincent, and the Grenadines.
Zenfinex Limited is a company registered in England and Wales under registered number: 11077380. Authorised and regulated by the Financial Conduct Authority under firm reference number 816055. Its registered office is 4th Floor, 4 Eastcheap, London, EC3M 1AE, United Kingdom.
*All trading involves risk.