The British Pound sold off Thursday following the BoE MPC decision to keep rates steady and signalling a rate cut in the next meeting, in August. With the Bank of England largely seen ahead of the Fed in the easing cycle bias for the currency will remain on the sell side as we have clearly broken through the floor of the May/June range play. We have little in the way of a market moving event for the UK this week about the only thing of note being Governor Bailey’s press conference on Thursday this will be for the Financial Stability Report with less to do on the broader economy.
Resistance
- 1.26998 – Intraday Consolidation Lows
- 1.26728 – Daily Range Play Lows
- 1.26514 – Intraday Consolidation High
Support
- 1.26219/274 – Friday Low / 50D Moving Average
- 1.25934 – Intraday Consolidation High
- 1.25748 – Daily Low / High
With our bearish break out and follow through drop Friday, we retain a bearish bias for GBPUSD though it would be best to wait for better prices from the 1.26728 area. For now we note that our breakout from last week has been accompanied by a stochastic push into oversold levels underscoring a change in the equilibrium. An alternative entry for us will be at the break of 1.26219/274 region represent Friday’s Low and the 50D Moving Average. At this point we would hold off on taking the buy side.
