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GBP/AUD Signal - BoE Meeting - 03 Aug 2017

Signal details
Entry Price: 
1.6650
Close Price: 
1.6533
Direction: 
Low
Expiry Time: 
20:00 GMT
Result: 
ITM
How we trade
5/5 of 4 ratings

The Bank of England's monetary policy committee members (MPC) will be meeting today for the monthly policy review. According to economists polled, no changes to the UK interest rates are expected at today's meeting. The UK's benchmark interest rates remain at the historical low of 0.25%. There are also no changes to the central bank's asset purchase program.

The BoE meeting is scheduled at 11:00 GMT today. Despite monetary policy staying unchanged, MPC members are likely to debate on the potential for a rate hike. Last month, 3 MPC members voted for a rate hike. However, their votes were over ruled by a majority of 5 members who voted in favor of no change to interest rates.

The Bank of England Governor, Mark Carney has remained quite hawkish since the July MPC meeting. Not so long ago, Carney spoke at a banking conference in Sintra, Portugal where he said that interest rates could rise. This was hawkish and sent the British pound surging higher. The GBP has maintained strong gains since then especially against the U.S. dollar.

At today's meeting, traders are expecting the BoE to maintain a hawkish tone in the markets. There is also a potential for the BoE officials to issue forward guidance as to when interest rates could start to rise. The main case supporting the rate hike comes from the fact that inflation in the UK has remained firmly entrenched above the BoE's 2% inflation target rate. However, the nation's gross domestic product remains weak. In the second quarter ending June 2017, the UK's GDP rose just 0.3% on the quarter.

Based on the above data, today's binary trade is on GBPAUD. The currency pair remains strong to the upside especially against a weakening Australian dollar. But considering the volatility, technical analysis suggests a scope for a pullback in prices. Immediate support is seen at 1.6650. A close below this level will suggest weakness in the currency pair.

Therefore, we trade daily PUT options in GBPAUD at 1.6650 for a 20:00 GMT expiry time. We expect to see the forex pair breaking below 1.6650 support to close lower on the day.

forex binary signal gbpaud 03 Aug 2017

Disclaimer: The article is written for informative purposes only and it is not financial advice. The author does not have any position in the currency pairs mentioned, and no plans to initiate a position. He wrote the article himself and expressed his own opinions. He has no business nor personal relationships with any mentioned government entities or stocks. Readers should not treat any opinion expressed by the author as a specific inducement to make a particular trade or follow a particular strategy, but only as an expression of his opinion.