GBPUSD Eyes BOE For A Break

Key Highlights

  • British pound climbed higher recently against the US dollar, but failed around an important resistance area.
  • In the UK, the BOE Interest Rate Decision will be announced by the Bank of England, which might cause heavy movements in GBPUSD.
  • GBPUSD is forming a breakout pattern with support at 1.4850 and resistance ahead at 1.4950.

Technical Analysis

The British pound managed to surge higher yesterday against the US dollar and was one of the best performers. However, the GBPUSD pair failed to maintain the momentum and traded lower. It found resistance around an important area at 1.4980-1.50.

There is a contracting triangle pattern formed on the 4-hour chart of the GBPUSD pair, which is acting as a catalyst. The recent failure was also around the triangle resistance, and currently the pair is heading towards the support area. Moreover, the pair is finding bids around the 100 simple moving average (SMA).

GBPUSD 04.09.2015

On the upside, the triangle resistance is also coinciding with the 61.8% fib retracement level of the last leg from the 1.5164 high to 1.4680. In short, there is a great chance of the pair moving lower in the near term.

UK Trade Balance

Today, during the London session, there are a couple of high-risk events lined up in the UK, including the trade balance report and the BOE interest rate decision. The UK trade balance report representing the balance between exports and imports of goods will be released by the National Statistics. The last reading was a deficit of £-0.616B. Let us see how it unfolds this time. Furthermore, the BOE Interest Rate Decision will be announced by the Bank of England.

Australian AIG Performance Index

Earlier today, the HIA/AiG Performance of Construction Index was released by the Australian Industry Group and the Housing Industry Association, which measures the conditions on the short and medium term in the construction market. The outcome was on the higher side, as the HIA/AiG Performance of Construction Index climbed from the last reading of 43.9 to 50.1 in March 2015.

AIG index

The report stated that there was sharp improvement in the new orders sub-index, which in turn helped the expansion in the HIA/AiG Performance of Construction to post a reading above 50 points for the first time in the five months, as per the official release.

Aayush Jindal

Aayush is a Senior Forex, Cryptocurrencies and Financial Market Strategist with a background in IT and financial markets. He specialises in market strategies and technical analysis, and has spent over a decade as a financial markets contributor and observer. He possesses strong technical analytical skills and is well known for his entertaining and informative analysis of the currency, commodities, Bitcoin and Ethereum markets.

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