The British pound sterling has been steadily declining against the US dollar, with the GBP/USD pair trending towards 1.2848. This downward trend is influenced by various factors, including the pressure from the USD rate and speculations surrounding the Bank of England meeting. Investors are eagerly awaiting the outcome of the meeting and the decision on interest rates. There is a possibility that the BoE will lower the interest rate from 5.25% to 5.00%, given the current inflationary environment and the state of the employment market in the UK. This potential rate cut is already factored into GBP quotes, but the details provided in the Bank of England’s accompanying statement will directly impact the future movements of GBPUSD.
On the H4 chart of GBP/USD, the market has shown a decline wave to 1.2820 followed by a correction to 1.2867. The current downward movement is expected to continue towards 1.2772, with a possible correction to 1.2870 before another decline wave to the local target of 1.2611. This scenario is supported by the MACD indicator, which indicates a bearish trend. Similarly, on the H1 chart, a correction wave towards 1.2867 is in progress, with a subsequent downward wave expected to reach 1.2772. The Stochastic oscillator confirms this bearish trend, with the signal line positioned below 50 and continuing to decline towards 20.
Investors and traders should closely monitor the Bank of England’s statement for any indications of future policy direction. The tone of the BoE’s statements may be cautious, signaling a conservative approach to interest rate adjustments. Any hints of rapid rate cuts or significant policy shifts could impact the short to medium-term trajectory of the GBP/USD pair. It is essential for investors to stay informed and adapt their trading strategies based on the information provided by the Bank of England. The volatility in the forex market, especially the GBP/USD pair, requires a careful analysis of economic factors and central bank decisions to make informed trading decisions.