BoE remains on hold

The BoE’s interest rate decision occurred during yesterday’s trading session. The bank remained on hold as was widely expected, yet we would like to point out that the expected votes for a rate cut were 2 and the expected votes to remain on hold were 7, whereas the final tally was one vote for a rate cut and eight votes for the bank to remain on hold. This may imply that the hawk’s within the bank are ‘growing stronger’ which in turn could be perceived as hawkish in nature and could thus aid the pound.Over in Asia, Japan’s Core CPI rate for February came in hotter than expected, with the Core CPI rate on a year-on-year level coming in at 3.0% versus the expected 2.9% . The hotter-than-expected inflation print could imply that inflationary pressures in the Japanese economy remain stubborn and could thus increase pressure on the bank to continue on their rate hiking path. However, the headline CPI rate for the same month came in at 3.7% which is lower than the prior rate of 4.0% which may tend to cast doubt on our aforementioned statement. Furthermore the showcasing of easing inflationary pressures may have the opposite effect on the JPY, as it may instead increase pressure on the bank to withhold from aggressively hiking interest rates in the near future. Looking at Monday’s Asian session the preliminary manufacturing PMI figures for Japan and Australia for the month of March may bring some excitement to the start of the trading week. Should the manufacturing PMI cases showcase an improvement in the manufacturing sector of their respective economies it may aid their currencies as well. On the other hand should the figures showcase a worsening manufacturing sector it may have the opposite effect.

GBP/USD appears to be moving in a downwards fashion after meeting heavy resistance near the 1.2985 (R1) resistance level. However, we would like to note that the RSI indicator below our chart currently registers a figure above 60, which tends to imply a bullish market sentiment. Yet when looking at the big picture, the current figure which dropped from 70 may imply that the bullish momentum may be fading away. Nonetheless, for our bearish outlook we would require a clear break below the 1.2830 (S1) support level with the next possible target for the bears being the 1.2670 (S2) support level. On the flip side for a sideways bias we would require the pair to remain confined between the 1.2830 (S1) support level and the 1.2985 (R1) resistance line. Lastly, for a bullish outlook we would require a clear break above the 1.2985 (R1) resistance level, with the next possible target for the bulls being the 1.3155 (R2) resistance line.

EUR/USD appears to be moving in a downwards with the pair appearing to take aim for our 1.0780 (S1) support level. We opt for a bearish outlook for the pair yet the RSI indicator currently registers a figure near 60 implying a bullish market sentiment , yet when looking at the bigger picture, it appears that the bullish sentiment may be fading away. Nonetheless, for our bearish outlook to occur we would require a clear break below the 1.0780 (S1) support level with the next possible target for the bears being the 1.0665 (S2) support line. On the flip side for a sideways bias we would require the pair to remain confined between the 1.0780 (S1) support level and the 1.0910 (R1) resistance line. Lastly, for a bullish outlook we would require a clear break above the 1.0910 (R1) resistance line with the next possible target for the bulls being the 1.1012 (R2) resistance level.

Other highlights for the day:

Today we get Canada’s retail sale rate for January and the Eurozone’s preliminary consumer confidence figure for March. In tomorrow’s Asian session we would like to highlight the release of Australia’s and Japan’s preliminary manufacturing PMI figures both for March. On a monetary level we note the CNB’s last monetary policy meeting minutes  and the speech by New York Fed President William’s.

GBP/USD Daily Chart

• Support: 1.2830 (S1), 1.2670 (S2), 1.2505 (S3)
• Resistance: 1.2985 (R1), 1.3155 (R2), 1.3310 (R3)

EUR/USD Daily Chart

• Support:1.0780 (S1), 1.0665 (S2), 1.0530 (S3)
• Resistance:  1.0910 (R1), 1.1012 (R2), 1.1110 (R3)

If you have any general queries or comments relating to this article please send an email directly to our Research team at research_team@ironfx.com

Disclaimer:
This information is not considered as investment advice or an investment recommendation, but instead a marketing communication. IronFX is not responsible for any data or information provided by third parties referenced, or hyperlinked, in this communication.

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