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GBP/USD Slides as BOE Cuts Rates
By Xinyang
Fundamental brief overview
GBP/USD slides as the BOE lowered interest rates for the first time since 2009, from 0.50% to a historic low of 0.25%. The BoE has also expanded its asset-purchase program for the first time since July 2012, from GBP 375 billion to GBP 425 billion pounds. A rate cut had been widely expected, especially after the BoE surprised the markets in July when it did not make a move.
Technical Insights
Currency performances:
1-year performance: -14.44%
6 months performance: -8.14%
3 months performance: -8.05%
1-month performance: 0.28%
Short term time frame: GBP/USD (30min chart)
Trend analysis: Bullish (50 SMA above 200 SMA). However, a death cross may be imminent as the 50 SMA has turned down.
Levels analysis: Critical support level at 1.3112 and critical resistance zone at 1.3171 - 1.318
Price action analysis: Price has broken down from a bullish channel after the released of the news that BOE cuts it's interest rate to 0.25%.
Summary: Moving averages are starting to form a potential death cross with a break down in price action. However, I am expecting the price to pull back to the critical resistance zone at 1.3171 - 1.318 before continuing its downtrend.
Long term time frame: GBP/USD (Daily Chart)
Trend analysis: Bearish (50 SMA below 200 SMA)
Levels analysis: Critical support zone at 1.27891 - 1.2852 and resistance zone at 1.3479 - 1.3533
Price action analysis: Broken down from a long-term bearish channel, currently trading in a small triangle formation.
Summary: Bearish indicators and price action, previously I am expecting the price to test the resistance formed by the bottom channel line before rolling over and continue downwards to the critical support zone at 1.27891 - 1.2852. However with a big drop today due to the bearish sentiment, I am betting on a breakdown of the triangle formation in the next few days and straight to the critical support zone.
Secular Trend (Year on Year%): GBP/USD (Monthly Chart)
Summary: Negative (Below 0), diminishing growth.
Currency's Sentiment (Base on CMC markets clients)
Number of buyers: 57%
Number of sellers: 43%
Position value of buyers: 33%
Position value of sellers: 67%
Overall sentiment: Bearish
GBP/USD slides as the BOE lowered interest rates for the first time since 2009, from 0.50% to a historic low of 0.25%. The BoE has also expanded its asset-purchase program for the first time since July 2012, from GBP 375 billion to GBP 425 billion pounds. A rate cut had been widely expected, especially after the BoE surprised the markets in July when it did not make a move.
Technical Insights
Currency performances:
1-year performance: -14.44%
6 months performance: -8.14%
3 months performance: -8.05%
1-month performance: 0.28%
Short term time frame: GBP/USD (30min chart)
Trend analysis: Bullish (50 SMA above 200 SMA). However, a death cross may be imminent as the 50 SMA has turned down.
Levels analysis: Critical support level at 1.3112 and critical resistance zone at 1.3171 - 1.318
Price action analysis: Price has broken down from a bullish channel after the released of the news that BOE cuts it's interest rate to 0.25%.
Summary: Moving averages are starting to form a potential death cross with a break down in price action. However, I am expecting the price to pull back to the critical resistance zone at 1.3171 - 1.318 before continuing its downtrend.
Long term time frame: GBP/USD (Daily Chart)
Trend analysis: Bearish (50 SMA below 200 SMA)
Levels analysis: Critical support zone at 1.27891 - 1.2852 and resistance zone at 1.3479 - 1.3533
Price action analysis: Broken down from a long-term bearish channel, currently trading in a small triangle formation.
Summary: Bearish indicators and price action, previously I am expecting the price to test the resistance formed by the bottom channel line before rolling over and continue downwards to the critical support zone at 1.27891 - 1.2852. However with a big drop today due to the bearish sentiment, I am betting on a breakdown of the triangle formation in the next few days and straight to the critical support zone.
Secular Trend (Year on Year%): GBP/USD (Monthly Chart)
Summary: Negative (Below 0), diminishing growth.
Currency's Sentiment (Base on CMC markets clients)
Number of buyers: 57%
Number of sellers: 43%
Position value of buyers: 33%
Position value of sellers: 67%
Overall sentiment: Bearish
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By Xinyang
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