OCT 8 BoE Rate Decision (OCT) (GMT 08:00: 04:00 EDT)
Expected: 0.50%
Previous: 0.50%
[B]Fundamental Outlook
[/B]
The BoE is expected to keep rates unchanged at 0.50% at their upcoming policy meeting and also refrain from adding to their asset purchase program which stands at £175 bln. Policy makers will most likely wait until November to make any additional determinations when they will have the latest quarterly inflation report. Additionally, the current round of quantitative easing will have expired and its results may determine the future course of action. There is great debate over whether the liquidity efforts are having their intended impact or does credit go to the broader global recovery. A lack of new efforts could generate sterling support as the central bank has been extremely dovish in its recent rhetoric. Conversely, additional measures ahead of the next month’s more informed meeting could significantly lower growth expectations for the U.K. and send the pound tumbling. This would coincide with the technical outlook which is calling for the current bearish trend to continue.
[B]
Technical Outlook [/B]
[B]British Pound / US Dollar Daily Bars [/B]
The trend remains down against 1.6130 and price action since the 9/28 low is viewed as a consolidation (perhaps a triangle). A resistance line is at 1.6105 tomorrow.
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