Yesterday's behavior of the GBP/USD confirms our assumption about the likely growth of the pound in the case of lowering the rate.
The rumors about the scale of the BoE rate cut only increase. The highest figure is raised to reduce the rate by 0.5% and asset purchase up to 200 billion pounds. In this case, it is not surprising if, at lower rates decrease, just by 0.25% without the asset purchase program, the pound will go straight up.
The market expects that the program will be calculated at 70 billion pounds. If this volume is higher, this will entail a pessimistic rhetoric of officials in the near future and will be able to cause the weakening of the pound.
What about the fundamental data. The British services PMI remained unchanged in July - 47.4 points. The US data on employment change from ADP showed an increase of 179K against the expectations of 170K. The Services PMI rose to 51.4 against the forecast of 51.0. The ISM Non-Manufacturing PMI showed 55.5 vs. the forecast of 56.0.
Today the Bank of England publishes its decision on monetary policy, and then half an hour later, Mark Carney will give his comments.
The United States will present data on factory orders. The forecast -1.8% against the previous value of -1.0%.
How to trade binary
We would buy call options if the pair rises above 1.3330.
Target price: 1.3330
Expiry time: 20:00 GMT