GBP/USD Jumps on Hawkish Comments from the BOE and the Queen – Chance To Sell?
Skerdian Meta • 2 min read
Last Thursday, the BOE (Bank of England) votes to hike interest rates jumped from 1 to 3 and the GBP rallied for around 100 pips.
Altho h, I didn´t think that the BOE would be brave enough to hike rates right now. In fact, that would be a bit naive if not foolish and Carney (BOE Chairman) agreed with my opinion yesterday. His comments brought the market back to its senses and GBP/USD lost about 170 pips.
But now, another BOE member is trying to be hawkish. Haldane said, in an interview a short while ago, that “downside skew in inflation expectations has dissipated” and that he sees UK economic growth as solid.
We know that inflation has picked up pretty fast in the UK, but I have no idea where he is seeing this economic boom in the UK.
There were some surprising/impressive economic figures reported during the end of last year and the beginning of this year from the UK, but those numbers have deteriorated over the last few months.
Didn´t we see wages take a dive last week? I had to check the economic calendar again because I started doubting myself, but yes, they did and so did the services and manufacturing PMI the previous week.
So no, the UK economy is not solid, it´s quite the opposite.
However, GBP/USD has climbed more than 100 pips over the last couple of hours and the Queen is to blame as well. She delivered a speech about Brexit a while ago and her view on the matter was a bit soft, unlike PM May.
I don´t know if the Queen´s words have helped the Quid, but this is a good opportunity to look for shorts in GBP/USD. 1.2750-1.28 would be a good place for a long term sell forex signal, but we´re a bit far from there.
I´d rather sell at the moving averages above
The H4 chart is still oversold, so I´ll wait until it becomes overbought. Hopefully, by that time we will have reached the red and green moving averages which will add extra strength to the 1.28 resistance level.
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