The British pound sterling has been on a steady decline against the US dollar, with the GBP/USD pair trending towards 1.2848. The pressure from the USD rate is a significant factor contributing to this trend. However, investors are eagerly awaiting the outcome of today’s Bank of England meeting and its decision on interest rates. There is speculation that the BoE will lower the interest rate from 5.25% to 5.00% in response to the inflationary environment and the state of the employment market in the UK. The probability of a rate cut is currently estimated at 65%.
An early move towards monetary policy easing by the Bank of England is a possibility. However, it is expected that the regulator’s tone in its statements will be relatively cautious. The BoE is unlikely to lower the rate rapidly and will only act if it is fully confident about the economic conditions. This potential decision is already factored into GBP quotes, and future movements in GBPUSD will be directly influenced by the details provided in the Bank of England’s accompanying statement.
On the H4 chart of GBP/USD, the market has executed a decline wave to 1.2820 followed by a correction to 1.2867. The current downward movement towards 1.2772 is underway, with a possible correction to 1.2870 before a new decline wave to the target of 1.2611 is expected. The MACD indicator supports this scenario, showing the signal line below the zero mark and pointing downwards.
On the H1 chart of GBP/USD, a correction wave towards 1.2867 is currently in progress. The formation of the next downward wave to the initial target of 1.2772 is expected, followed by a potential correction to 1.2870. After completing the correction, a new decline wave to 1.2770 is likely. This scenario is confirmed by the Stochastic oscillator, with the signal line positioned below 50 and continuing to decline towards 20.
Investors and traders should closely monitor the Bank of England’s statement for any indications of future policy direction. The BoE’s stance will be crucial in determining the short to medium-term trajectory of the GBP/USD pair. The outcome of today’s meeting and the decision on interest rates will have a significant impact on the movement of the British pound sterling against the US dollar in the coming days.
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