The BOE is publishing its policy decision just as EUR/GBP is testing a key resistance area.
How do you think will price react to the BOE’s event?
I’m looking at EUR/GBP’s 4-hour chart today.
Before moving on, ICYMI, yesterday’s watchlist checked out EUR/AUD’s symmetrical triangle support ahead of top-tier economic events scheduled in the U.S. Be sure to check out if it’s still a valid play!
And now for the headlines that rocked the markets in the last trading sessions:
Fresh Market Headlines & Economic Data:
Eurozone retail sales drop by 0.4%, more than expected 0.1% dip in March
ADP: US companies added 247,000 jobs in April, sharply missing estimated 395,000
Canada’s trade surplus narrows from 3.1B CAD to 2.5B CAD as imports surge more than exports
U.S. trade deficit hits $109.8B – highest on record – as imports soar
ISM: U.S. service sector slows from 58.3 to 57.1 in April; input prices measure at record high
EU to phase out Russian supply of crude oil within six months, refined products by end of the year
Fed raises rates by 50bps as expected, talks of further increases to fight inflation
Fed to allow balance sheet reduction of $47.5B per month starting June, and up to $95B per month starting in September
All three major U.S. stock indices gained as Powell rules out 75bps rate hike
AU building permits dropped by 18.5% in March after 40.2% jump in February
AU trade surplus widened from 7.43B AUD to 9.31B AUD in March amid imports decline
Caixin: China’s services activity falls at second sharpest rate on record to 36.2 in April
Gov. Orr defends timing of RBNZ’s inflation response as ‘courageous’
Crypto exchange Coinbase opens up NFT marketplace to all users
China’s PBOC pledges policy support to counter pandemic woes
Asian shares firm as Fed tempers aggressive rate hike bets
Upcoming Potential Catalysts on the Forex Economic Calendar:
BOE’s policy decision at 11:00 am GMT
U.S. Challenger job cuts at 11:30 am GMT
U.S. initial jobless claims at 12:30 pm GMT
AU AIG services index at 10:30 pm GMT
Tokyo’s core CPI at 11:30 pm GMT
RBA’s quarterly statement at 1:30 am GMT (May 6)
Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️
What to Watch: EUR/GBP
If you’ve maximized all your Fed-related opportunities, then you’ll want to take a look at EUR/GBP’s chart!
See, the pair is chillin’ near .8450, which is a level that EUR/GBP bulls haven’t successfully breached since the start of 2022.
Let’s see if today’s Bank of England (BOE) decision will provide EUR and GBP traders clues as to EUR/GBP’s next direction.
Word around is that BOE members will raise their interest rates by 25 basis points for a fourth consecutive month, this time to 1.00%.
Members could turn less hawkish, though, as they won’t want to choke economic growth amidst the Russia-Ukraine war and global growth concerns.
If the .8450 resistance zone holds, then EUR bears could take advantage of a possible move to the .8350 levels close to the 100 and 200 SMAs, or even the 2022 lows near .8250.
If the BOE’s decision inspires GBP-bearish trends, however, then EUR/GBP could finally break above its 2022 resistance and maybe retest previous highs like .8550 or .8600.
