GBPUSD technical bearish, eye on BoE MPCMarket expectations for the November 7 meeting
The Bank of England's (BoE) Monetary Policy Committee (MPC) will meet this Thursday, with 90% of market participants expecting interest rates to be cut by 25 basis points from 5% to 4, 75%.
This follows the central bank's first interest rate cut of 2024, which took place at the meeting ending on July 31, 2024. At this meeting, the MPC voted with a majority to reduce the Interest Rate Bank interest rate 0.25%, down to 5%.
Key economic indicators influence decisions
Recent data paint a complicated picture for BoE decision-makers. The current inflation index of 1.7% is lower than the bank's 2% target, so is no longer an immediate concern for the BoE.
According to the Office for National Statistics, the UK unemployment rate (for those aged 16 and over) is estimated to be 4.0% in June to August 2024 compared to 4.1% before there.
From June to August 2024, average annual employee regular earnings growth (excluding bonuses) is 4.9% and the region's average annual regular earnings growth public sector was 5.2%, down 5.7% compared to the same period three months ago; for the private sector it is 4.8%.
Global monetary policy context
The US Federal Reserve (Fed) also meets this Thursday, with markets pricing a 25 basis point interest rate cut to 4.50%-4.75% with a probability of nearly 100%. This creates an interesting context for the BoE's decision as global central banks are increasingly shifting their focus from fighting inflation to supporting economic growth.
Analyze technical prospects OANDA:GBPUSD
On the daily chart, GPB/USD recovered from the lower edge of the price channel, however, the recovery was limited as the main trend of GBP/USD up to now is still a downtrend noticed by the channel. price.
GBP/USD is also under pressure from the 0.236% Fibonacci retracement level, the 1.30042 horizontal resistance level and the EMA21 moving average.
Even if GBP/USD manages to move above 1.30042, it still doesn't have much solid bullish conditions as there are other resistance levels above from 1.30448 and the confluence of the upper channel edge with the 0.382% Fibonacci.
As long as GBP/USD remains below Ema21 and within the price channel it remains technically bearish, while the Relative Strength Index is also close to 50, the 50 level being considered resistance when RSI is below this level.
During the day, the technical outlook for GBP/USD is bearish with the highlights listed below.
Support: 1.29073 – 1.28448
Resistance: 1.29842 – 1.30042 – 1.30448 – 1.30705
