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GBP/USD trading signal - BoE Meeting - 21 Jun 2018

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21:00 GMT
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The Bank of England will be meeting today for its monetary policy meeting which is scheduled to end with the release of the monetary policy statement at 12:00 GMT. According to the economists polled, the Bank of England is expected to hold its key interest rate unchanged at 0.50%.

The decision comes following last month's inflation and wage growth report which showed a softer patch of economic data. The BoE had initially prepared the markets for another rate hike in May. However, the recent declines in various aspects of the economy alongside the Brexit uncertainty pushed expectations further down the line.

Investors are now hoping that the next BoE rate hike will likely come in the August meeting. However, this is also doubtful unless the UK's economy powers back ahead. The first quarter GDP showed that the UK's economy advanced just 0.1% on the quarter which was one of the weakest paces of growth seen.

At today's BoE meeting, investors will be focusing on the monetary policy statement as well as comments from the BoE Governor, Mark Carney. Carney is also scheduled to speak later in the week at the banking conference in Portugal which could also keep investors nervous.

It was the same banking conference last year that Carney came out strongly hawkish and following through with the first rate hike in nearly a decade and for the first time since the UK voted to leave the EU.

Based on the above, today's trading signal is GBPUSD. The currency pair has been trending weaker against a broadly stronger U.S. dollar. In the near term we expect to see a pullback to 1.3220 as we expect to see the GBPUSD retrace the losses on an intraday basis and eventually close higher on the day.

gbpusd trading signal 21 jun 2018

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. 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. All risks and coasts associated with online trading are your responsibility.