All eyes are on sterling today as the Bank of England meets for its latest policy decision.
GBP/USD fails to break from downtrendAn overnight rally took the pair above $1.3250, but the 100-hour simple moving average ($1.3258) prevented further gains. The pair certainly looks stuck in a downtrend, with the overnight high marking the latest lower high.
Now we look to see if $1.3150 can be breached to create a new lower low and a path to the $1.3050 area seen at the end of August. Bulls would need to see a push through $1.3280, with the 12/13 Sept peak at $1.3350 the next target to watch for. An attainment of the latter would certainly mark the beginning of a new uptrend.
EUR/GBP continues its move higherThe uptrend off the lows of 6 September remains intact, with the dip from Tuesday met by furious buying. Support in the early part of today’s session was found around £0.8480.
A dovish BoE could put more upward momentum into this pair, with a target of £0.8540 in the first instance. A drop through £0.8460 could raise the possibility that the move higher has reversed course.
USD/CAD pushes to July highThis pair offers another great trend, if it is rather steep at present. The price showed distinct reluctance to stay below C$1.3150, but with the August and September peaks now exceeded, the target to watch is the July high at C$1.3255.
With the price overbought intraday we may see some weakness, but it would need a firm move below C$1.3150 to suggest a new downtrend is beginning.
