The upcoming BoE rate decision could provide an opportunity for scalpers during pre-event risk price action. The uncertainty over the direction of the central bank may leave traders on the sidelines as several scenarios exist for policy makers. The last meeting saw the door left open for more quantitative easing efforts and subsequent rhetoric has reinforced that possibility.
[B]Key Technical Levels[/B]
Today we saw considerable volatility among the dollar crosses as the greenback has its footing following earlier weakness. However, the GBP/USD was relatively quiet which could be due to the looming event risk for the pair. We have seen the uncertainty over future monetary policy limit pound volatility over the past few weeks with the pound/dollar settling into a 350 pip range. Additionally, over the same period there has been very little variance between the daily closes.
[B]Quantitative Metrics [/B]
A declining ATR adds to the GBPUSD’s attractiveness for scalping strategies which is a product of the pair’s recent range. However, a wide Bollinger band width clearly shows that sterling is prone to volatile price movements which is a red flag for high frequency traders. However, an implied volatility of 11.34 is the third lowest of the pairs below and speaks to the recent stability that we have seen.
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