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CFDs are complex financial instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money. CFDs are complex financial instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

GBP/USD: Bank of England set to keep rates ahead of next month’s elections

Relatively positive technicals look to get shelved with traders holding opposite bias ahead of fundamental event.

GBP Source: Bloomberg

GBP/USD Technical analysis, overview, strategies, and levels

It’s a fundamental day for the pound and all GBP pairs as the Bank of England (BoE) is set to announce its monetary policy with expectations to keep rates on hold at 0.75%, as the central bank is unlikely to make any significant changes ahead of elections and more likely follow in the common theme that central banks globally have been reiterating regarding weakening global demand and trade uncertainties. The pound underperformed against most of the FX majors yesterday, but given overall movement was sedate meant that that underperformance was limiting as its price stalls at the highs. But technicals mean little in the face of significant fundamental forces.

Current Technical Overview Consolidation - Positive Bias
Technical Overview Conformist Strategies Sell 1st Resistance After Reversal, Buy 1st Support At/Before Price
Technical Overview Contrarian Strategies Buy 1st Resistance Upon Breakout From Below, Sell 1st Support Upon Breakout From Above
S/L for 2nd Resistance 1.3061
2nd Resistance 1.3020
S/L for 1st Resistance 1.2979
1st Resistance 1.2937
Relative Starting Point 1.2855
1st Support 1.2773
S/L for 1st Support 1.2731
2nd Support 1.2690
S/L for 2nd Support 1.2649

IG client and CoT sentiment for GBP/USD

Going into today’s event retail bias is at a modest majority long 55%, while institutional bias as per the latest CoT (Commitment of Traders) report is a majority short 64% and dropping on the extreme short bias it experienced only a couple weeks before that.

GBPUSD sentiment Source: IG charts
GBPUSD sentiment Source: IG charts

GBP/USD Chart with retail and institutional sentiment

GBPUSD chart Source: IG charts
GBPUSD chart Source: IG charts

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