Calm water do not expect no crocodiles. Pound traders will be more cautious expecting the market to 'shake' in the European session soon.
The throbbing is getting stronger ahead of the outcome of the England central bank's policy meeting for the August edition at 7pm local time.
The Bank of England (BOE) is expected to keep interest rates unchanged, but a follow -up speech by Governor Andrew Bailey will be the focus of investors to get clues on policy tightening measures.
If we look at the price movement on the chart of the GBP/USD currency pair, the price has been moving horizontally since the beginning of the week around the 1.39000 level while investors are wary of Pound trading.
The price increase was displayed in the European session yesterday but only touched the level of 1.39500 before the price fell back below the level of 1.39000 following the strengthening of the US dollar in the New York session which pressed the price.
The drop below the Moving Average 50 (MA50) barrier level in the 1 -hour time frame of the price movement makes investors also wary of bearish signals, but the outcome of the BOE meeting will determine the direction of further movement.
If the result of the meeting is in favor of the strengthening of the Pound, the price will jump above the level of 1.39000 and head to the resistance zone of 1.40000.
Continuing the previous bullish trend, the next price increase that passes 1.40000 will lead to a high of around 1.41000 to record the latest 6 -week high.
However, if the Pound experiences a significant depreciation after the results of the meeting, investors will see the price plummet to test the RBS (resistance become support) zone at 1.38000.
The continued lower decline will return to the previous focus level at 1.37000 and the support zone 1.36000.
