Cable didn't like it below 1.28

GBP/USD loses 0.22% today after the BoE rate decision event.
The pair accelerated below the descending wedge formation.

Rajan Dhall, MSTA FX Daily

Today at the Bank of England (BoE) meeting the vote split surprised markets as MPC members Saunders and Haskel turned dovish.

The vote ended up 7-2 in favour of keeping rates unchanged but the two mentioned above voted for a 25bps cut. Now the futures markets are pricing in a 20bps cut by the end of 2020 vs the previous expectations of 14bps.

The BoE also revised their growth and inflation forecasts:

"Inflation in one year's time at 1.51% (Aug. forecast 1.90%), based on market interest rates."

"Inflation in two years' time at 2.03% (Aug. forecast 2.23%), based on market interest rates."

"Inflation in three years' time at 2.25% (Aug. forecast 2.37%), based on market interest rates."

"Market rates imply more BoE loosening than in Aug, point to bank rate at 0.5% in 2022 (Aug 0.6%)."

"GDP growth of +0.4% QQ in Q3 2019 (Sept forecast +0.2% QQ), sees +0.2% QQ in Q4 2019."

GBP/USD 60-minute Chart

As you can see from the chart below the price accelerated lower below the chart formation,

Now things have settled down GBP/USD has consolidated just above 1.28. The market tried to push past the psychological support level but the bulls brought it back up.

The election and Brexit situation is still the main theme for the pair so bare that in mind. The BoE events are secondary in nature. On the daily chart 1.2787 is still the support level to beat. If that breaks then the pair would have created a lower high lower low wave formation. Beyond that, the next support on the daily chart hold at 1.2525.

Author

Rajan Dhall, MSTA

FX Daily

Rajan Dhall is an experienced market analyst, who has been trading professionally since 2007 managing various funds producing exceptional returns.

EUR/USD clings to strong gains above 1.1850 on USD weakness

EUR/USD preserves its bullish momentum to start the week and trades above 1.1850. The US Dollar struggles to find demand ahead of Wednesday's critical January employment report and helps the pair continue to push higher.

GBP/USD hovers near 1.3600 as UK government crisis weighs on Pound Sterling

GBP/USD moves sideways after registering modest gains in the previous session, trading around 1.3610 during the European hours on Monday. The pair could come under pressure as the Pound Sterling may weaken amid a fresh government crisis in the United Kingdom.

Gold holds steady above $5,000

Gold builds on the gains it posted to end the previous week and holds steady above $5,000 on Monday. Data released over the weekend showed that the People's Bank of China extended its Gold buying spree for a 15th month in January. Moreover, dovish US Fed expectations and concerns about the central bank's independence drag the US Dollar lower for the second straight day, providing an additional boost to the non-yielding yellow metal.

Cardano steadies as whale selling caps recovery

Cardano (ADA) steadies at $0.27 at the time of writing on Monday after slipping more than 5% in the previous week. On-chain data indicate a bearish trend, with certain whales offloading ADA. However, the technical outlook suggests bearish momentum is weakening, raising the possibility of a short-term relief rebound if buying interest picks up.

Japanese PM Takaichi nabs unprecedented victory – US data eyed this week

I do not think I would be exaggerating to say that Japanese Prime Minister Sanae Takaichi’s snap general election gamble paid off over the weekend – and then some. This secured the Liberal Democratic Party (LDP) an unprecedented mandate just three months into her tenure.

Bitcoin, Ethereum and Ripple consolidate after massive sell-off

Bitcoin, Ethereum, and Ripple prices consolidated on Monday after correcting by nearly 9%, 8%, and 10% in the previous week, respectively. BTC is hovering around $70,000, while ETH and XRP are facing rejection at key levels. Traders should be cautious: despite recent stabilization, upside recovery for these top three cryptocurrencies is capped as the broader trend remains bearish.