Forex Signals Brief for June 20: BOE Falls into Focus
Rowan Crosby • 2 min read
It certainly has been a big week of central banks. Yesterday, we had the FOMC reiterating its dovish stance on monetary policy while the BOJ remains on its usual course.
Today the attention is on the BOE who might well offer a slight change of pace from what we’ve been hearing. While most central banks, such as the FOMC, ECB, RBA and RBNZ have all been rather dovish and even cutting rates, there is some expectation today that the BOE will be in fact looking to hike rates at some point in the future.
There are a number of factors that have been holding the BOE back, such as the Brexit sagas and the political fallout from the inability to get any kind of deal together. However, policymakers continue to believe that markets have not been pricing in rate hikes in line with the actual probabilities. That means there could well be some upside here in the GBP/USD if we get any hint of a hike today.
Of course, there is no expectation of a rate change today, but as has been the case recently, it is all about the guidance.
Forex markets have been busy in the Asian session with the Greenback week, while GOLD is spiking higher. This looks like it could be a very active session.
Forex Signal Update
The FX Leaders Team finished with 3 wins from 6 signals, in what ended up being a busy day ahead of the FOMC.
USD/JPY – Pending Signal
Despite the BOJ today the USD/JPY continues to simply be a safe-haven trade and responds largely to world events. As a result of the ongoing uncertainties, the JPY keeps on getting bid up and the Yen is falling. As such we are hunting a short post today’s BOJ.
EUR/GBP – Active Signal
The EUR/GBP, has been in a sharp uptrend of recent times and we are long here looking for a continuation of that trend. 0.8900 is support for the time being, but much will depend on what the BOE has to say at today’s meeting.
BTC continues to tread water around the $9,000 level as much of the interest at the moment is on Facebook’s Libra.
The questions being asked are really just what Libra means to the world. Is Libra validating the entire industry? How will mainstream adoption go and is that a good or a bad thing for other coins like Bitcoin?
An interesting quote today is that ‘Bitcoin is digital gold, but Libra is the digital dollar’. Perhaps that sums up the opinion on the matter for now. For the time being Bitcoin has run up higher on the back of the news and other factors such as the halving event in 2020. However, we have some busy times ahead.