When are the BOE Inflation Report Hearings and how could they affect GBP/USD?
|Overview
The Bank of England (BOE) inflation report hearings, due at 0915 GMT, will hog the limelight amid a data-sparse EU calendar this Wednesday. Among the testimonies by the BOE policymakers, Governor Mark Carney’s testimony will be closely heard, in the face of the recent dovish tilt. Note that the hearings will be on the May inflation report.
Analysts at TD Securities (TDS) noted: “Given the age of the report (it was issued nearly 2 months ago, and the session was delayed on account of Parliamentary drama), the officials are likely to focus more on recent developments. In particular, this could give Saunders (and perhaps others) a chance to explain his hawkish comments ahead of the somewhat cautious MPC meeting only days later.”
“The BoE's job seems pretty simple right now compared to what is has previously. Given the growing uncertainty both domestically and abroad, there seems little reason to be adjusting rates in the foreseeable future, something markets are on board with. One point of interest may be the suggestion last week that the markets were incorrectly pricing the prospect of rate hikes, which given that they're gradually pricing in a cut over the next year or so, hasn't changed. Carney may try to reinforce this message today, although it may fall on deaf ears again,” Craig Erlam, Market Analyst at MarketPulse explains.
How could affect GBP/USD?
According to FXStreet’s Senior Analyst, Yohay Elam, “the Technical Confluences Indicator shows that cable enjoys support at 1.2667 where we see the convergence of the previous hourly low, the Bollinger Band 15min-Lower, and the BB 1d-Middle. Further support awaits at 1.2602 where we note the confluence of the Pivot Point one-day Support 2 and the Fibonacci 61.8% one-week. The next cushion is at 1.2564 where the previous monthly low meets the BB 1d-Lower.”
“Resistance awaits at 1.2707 where we see a dense cluster of lines including the SMA 5-4h, the SMA 200-4h, the SMA 5-1d, and the Fibonacci 23.6% one-month. The next cap is 1.2800 which is where the Fibonacci 38.2% one-month, the BB 1d-Upper and the previous daily high,” Yohay adds.
Key Notes
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About the BOE Inflation Report Hearings
The Treasury Committee is appointed by the House of Commons to examine the expenditure, administration and policy of HM Treasury, HM Revenue & Customs, and associated public bodies, including the Bank of England and the Financial Services Authority.
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