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GBP/USD Trading - Bank of England meeting - 02 Feb 2017

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GBP/USD trading chart 2 Feb 2017
5/5 of 4 ratings

Yesterday the Cable strengthened awaiting the Fed's decision

The pound continued to rise up to the Fed's decision. The release appeared moderately optimistic. The regulator noted the economic growth and confirmed that the rate decision will be taken in accordance with the following parameters. We didn’t see any hint of external or internal risks.

The US fundamental data also pleased yesterday

The ADP non-farm employment change significantly exceeded the forecast: 246K vs. 165K and 151K in December. Later, the ISM Manufacturing PMI showed an excellent growth from 54.5 to 56.0 against the forecast of 55.0.

Fed formally remains neutral, the government will be able to start infrastructure projects only when the new budget will be agreed. However, don’t forget that in March we will a fight with Congress on the issue of raising the debt limit.

Today the Bank of England will announce its decision on monetary policy, but after the "neutral" position of the Fed, any changes aren’t expected. In Britain, the Construction PMI is expected to decrease from 54.2 to 53.9 in January, that the market is likely to ignore it.

The US weekly jobless claims may be reduced from 259K to 250K, the unit labor costs are expected to increase from 0.9% to 1.9%.

How to trade binary?

The short-term downward movement is possible in the range of 1.2595 - 1.2555. The upward movement is possible after the break of 1.2685.

We would buy Call options if the price goes above 1.2685. This scenario would be invalidated if the pair goes below 1.2595, in which case we would go for Put option with the end of the expiry.

Asset: GBP/USD

Direction: Call

Target price: 1.2685
Expiry time: 21:00 GMT

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.

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