BOE decision puts pressure on the GBPUSD
The BOE lowered CPI and GDP estimates in their latest inflation report, kept rates unchanged as per expectations, and the GBPUSD fell sharply.
The GBP had expected a lot with the GBPUSD making new highs since September 2016, but the headlines underwhelmed. Taking on a key event and release at an extreme is a dangerous game. Trading bias is skewed and ripe for disappointment.
Technically, the price tumbled below a lower trend line at 1.3191, and the 100 hour MA at 1.3185. The pair had found support initially against the 38.2% of the move up from the July 20 low at 1.3139 at least initially. We have been trading between those levels since the decision (the high corrective price reached 1.31824).
So the sellers are keeping a lid on the price. That is risk now for the short. Stay below is more bearish.
What now?
A move below the 38.2% will next tackle the 200 hour MA at 1.3122. The 61.8% of the move up from the July 20 low comes in at 1.3060.
This is what it looks like on the daily chart (see chart below). The price fell below the topside trend line at 1.3180 area (the high correction went to 1.31824).
The lower trend line cuts across at 1.3047. A week ago, the low reached 1.3049. So it is a doable target going forward.
