November 2, 2021

What is the Fate of GBP/USD Ahead of This Week's BOE Policy Meeting?

 The price movement on the chart of the GBP/USD currency pair at the opening of the November market was more flat after the aggressive decline in the price at the close of October trading last Friday around 130 pips.

The US dollar was seen putting pressure on the Pound over the weekend with consumer spending data posting a positive reading but moving back slowly again earlier in the week ahead of the FOMC meeting and the US NFP jobs report.

Meanwhile, investors are increasingly wary of Pound trading ahead of the outcome of the England central bank (BOE) policy meeting following expectations for impending policy tightening.

In addition, the uncertainty of Brexit is a current factor that threatens the stability of the Pound in the wake of the recent waters crisis involving the UK and France.

As of last week's trading, the price on the GBP/USD chart has declined from the resistance zone of 1.38300 to the level of 1.36500 until Monday yesterday which is the current support level of the price.

Failing to break to lower levels, the price showed an increase yesterday from the support of 1.36500 around 50 pips increase before declining back to that support to continue in the early trading of the Asian session this morning (Tuesday).

If investors continue to lose confidence in the Pound, the price is likely to slip lower below the 1.36500 support and head to the previous major price support around 1.35700.

A decline to that level will record around 80 pips of movement on the bearish trend on the GBP/USD chart ahead of the BOE policy meeting.

If the price manages to make a rise from the 1.35600 zone, the SBR (support become resistance) zone around 1.37200-1.37400 will be re-tested to give an early signal of a bullish trend change.

The Moving Average 50 (MA50) barrier level on the 1 -hour time frame will also give an indication that the price upward movement will start if the price manages to break it.

A higher rise is likely to head back to the 1.38300 high for the price to retest the key resistance zone.