The Bank of England is due to update the market on with its latest decision on the Official Bank Rate in the coming hours and traders are poised for some big moves across sterling products. Even though the meeting is not considered to be ‘live’ in the sense that a change in the rate is not expected at all, recent data and voting member updates suggest that we could see a change of guidance from the MPC which should result in more volatility. FX Traders will be looking closely at Cable on the rate announcement with a particular focus on the voting statistics, if one or more members have voted for a cut in this meeting expect this more dovish tone to see the pound move lower. Cable has been trading just under the 1.2500 level for the last few sessions but expect these rangebound conditions to change swiftly later today, any dovish skew from the MPC should see short-term trendline support at 1.2475 and overnight low at 1.2464 challenged swiftly which could open the way for a move to the longer-term support line, currently at 1.2360. Any hawkish result should see Cable move back into recent higher ranges with initial resistance on the 200-day moving average at 1.2531.
Resistance 2 : 1.2605 – Long-Term Trendline Resistance
Resistance 1 : 1.2531 – Hourly 200-day Moving Average
Support 1 : 1.2475 – Short-Term Trendline Support
Support 2 : 1.2360 – Long-Term Trendline Support
