Thursday, November 5, 2015

GBP/USD treads water around 1.5385, BOE eyed

FXStreet (Mumbai) - The pound trades around a flat line versus the US dollar in the early European hours, keeping GBP/USD in a narrow range below 1.54 handle.

GBP/USD capped below hourly 50-SMA

The GBP/USD pair trades flat at 1.5387, unable to extend beyond 1.5390 levels since Tokyo open. The major is currently consolidating to the downside and meets supply on every attempt to 1.54 handle, where the hourly 50-SMA lies.

The cable trades cautious as markets refrain from taking big bets before the BOE decision, minutes and quarterly inflation report as any hawkish hints from the inflation report and/or the voting composition can spur a sharp GBP rally across the board.

Moreover, the greenback is likely to keep an upper hand versus the pound following Wednesday’s Yellen’s comments, which cited Dec Fed rate rise as a live option.

Meanwhile, all eyes remain on the BOE’s ‘Super Thursday’ due later today, with main focus on the BOE minutes and the quarterly inflation report. While Friday’s non-farm payrolls data is also expected to keep traders on the edge.

GBP/USD Levels to consider

The pair has an immediate resistance at 1.5400/05 (round number/ 1h 50-SMA), above which 1.5442/50 (100-DMA/ psychological levels) would be tested. On the flip side, support is seen at 1.5356/48 (Nov 4 Low/ 50-DMA) below which it could extend losses to 1.5302/00 (Oct 30/ psychological levels).
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