BOE Up Next

The BOE meeting has the potential to be a major catalyst for GBP price action over the remainder of the summer. Given the better data recently, the hawkish shift among some policymakers and the fact that, so far, the government’s re-opening plan has not sent COVID infections soaring, there is a high degree of hawkish expectations going into today’s meeting. While no policy change is expected, traders will be looking for amore constructive outlook and a sign the bank is moving nearer to policy normalisation. If so, GBP is likely to trade firmly higher near term. On the other hand, given this level of expectation, there is plenty of room for bulls to be left disappointed if the BOE sticks to its guns and retains a more cautious tone.

Where to Trade The BOE Meeting?

GBPJPY

The current price action is GBPJPY is interesting because the 153.39 level could potentially be the right shoulder of a large head and shoulders pattern, paving the way for a reversal lower with a downside break of 151.36 targeting 149.39. Alternatively, if we break above the bear trend line and the 153.39 level, in line with bullish MACD and RSI, this will turn focus to the 156.66 highs once again.