The Bank of England (BOE) is up in a few so you know we’re looking at major GBP pairs!
What do you think of GBP/USD hitting a channel support?
Before moving on, ICYMI, yesterday’s watchlist checked out USD/JPY’s triangle consolidation ahead of the FOMC event. Be sure to check out if it’s still a valid play!
And now for the headlines that rocked the markets in the last trading sessions:
Fresh Market Headlines & Economic Data:
Japan’s markets out on bank holiday today
Australia’s services PMI eased from September’s 50.6 to 49.3 in October
Australia’s trade surplus jumped to a three-month high of 12.44B AUD in September
China Caixin services activity dipped further from 49.3 to 48.4 in October on COVID restrictions
Asian shares slip, yields up as Fed signals higher for longer
Switzerland inflation rate falls to 5-month low of 3.0% in October vs. September’s 3.3% increase
Eurozone’s unemployment rate at 10:00 am GMT
US Challenger job cuts at 11:30 am GMT
BOE’s policy decision at 12:00 pm GMT
BOE Gov. Bailey to give a speech at 12:30 pm GMT
U.S. initial jobless claims at 12:30 pm GMT
Canada’s trade balance at 12:30 pm GMT
Canada’s building permits at 12:30 pm GMT
US ISM services PMI at 2:00 pm GMT
Australia’s retail sales data at 12:30 am GMT (Nov 4)
RBA’s quarterly statement at 12:30 am GMT (Nov 4)
Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️
What to Watch: GBP/USD
In a few hours the BOE is expected to raise its interest rates for the eight consecutive month.
Markets are pricing in a 75bps rate hike to 3.00%. This would mark the fastest increase since 1989 and the highest borrowing rate since late 2008!
But WILL BOE members vote for a 75 bps hike?
Some are saying that we could see a 50 bps increase as some members consider a future slowdown for inflation and caution against “overtightening.”
A 50 bps rate hike would disappoint GBP bulls who already priced in a 75 bps increase.
GBP/USD, which is already flirting with the bottom of an ascending channel support, could break below its 4-hour 200 SMA and trend line support zone.
But don’t forget that BOE will also publish new growth and inflation expectations!
A 75 bps rate hike or optimistic growth and inflation forecasts could support GBP/USD in its current levels.
The pair could bounce from its uptrend support and head towards the 1.1500 mid-channel zone or even the 1.1650 highs from last week.