With the Federal Reserve’s interest rate decision due on Wednesday, followed by the Bank of England on Thursday, GBP/USD could be in for additional volatility in the days ahead.
Record-high UK inflation and a robust American economy has created an expectation for both central banks to hike rates by 75bps this week. However, traders will be paying close attention to the respective statements made after each meeting for signs of either CB possibly pivoting to sooner rather than later.
Cable has recovered significantly since the announcement of Liz Truss’s mini-budget plans took it to its lowest level on record. The pair has since formed an ascending wage formation on the daily chart, and as it is currently approaching the apex, the next few days could determine whether we see a break higher, or a new leg lower.
Check out this article for a deeper insight into what to expect from this week’s central bank meetings, and where GBP/USD could be headed as a result: