STERLING POUND OUTLOOK: GBP / USD PRICE ACTION IN FOCUS AS BANK OF ENGLAND RATE DECISION AND INFLATION REPORT
- GBP / USD price action largely depends on the risk of high impact events like the BoE’s decision on the bridge
- Sterling could continue its bullish trend if Bank of England postpones NIRP remarks
- US dollar remains in hot seat with greenback hovering around two-year low
GBP / USD is gaining ground Wednesday on the back of broader US dollar weakness. The USD has been decimated recently as the US dollar index falls to its lowest in two years. That said, the GBP / USD spot price action looks ripe for potential. currency volatility later, forex traders look to the second half of the week.
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This takes into account the risk of a high impact event hanging over the pound-dollar, including a BoE decision and the release of the non-agricultural wage bill The data. Detailed on the DailyFX Economic Calendar, the Bank of England is expected to release its monetary policy update on Thursday 06 August at 6:00 GMT.
GBP / USD PRICE TABLE: DAILY FRAMEWORK (MAY 04 TO AUG 05, 2020)
The British pound could react violently to any language change from the BoE’s Monetary Policy Committee regarding negative interest rate policy or the current pace of the central bank quantitative easing. Weekly data on jobless claims in the United States, a leading indicator of the labor market, is due Thursday at 12:30 GMT. Jobs figures released earlier in the week could set the tone for NFPs expected to cross market threads on Friday 07 August at 12:30 GMT, and could also weigh heavily on GBP / USD price action.
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On that note, the one-week and one-night implied volatility measures for the GBP / USD have checked above Recently, forex traders are anticipating the possibility of high market activity around the aforementioned event risk. Statistically speaking, an implied trading range of options of technical support and resistance is estimated to contain the spot price action 68% of the time during the given duration.
– Written by Rich Dvorak, Analyst for DailyFX.com
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