Forex snapshot

GBP/USD continues to drift lower edging closer to the $170 level while EUR/USD remains below the $1.3505 June lows.

Euro/dollar currency
Source: Bloomberg

Low interest in MPC results

Yesterday’s results from the last Monetary Policy Committee meeting barely caused a ripple of excitement in GBP/USD, as once again nine voted to keep rates unchanged and none voted for an increase. In order for there to be any chance of the Bank of England increasing the interest rate before the end of the year, we will need to see some sort of shift in mentality sooner rather than later.

Subsequently GBP/USD has continued to drift at a fairly sedate pace back down to the $1.70 level. At this point it is likely to find support from both the 50-day moving average and the longer-term resistance that had previously been there.

Although in the short-term it might be drifting, the longer-term outlook remains to the upside as interest rates will rise sooner or later.

GBP/USD chart

EUR/USD eyes $1.35 level

If we were to have speculated yesterday as to what, if any, surprises might materialise from this morning’s eurozone manufacturing purchasing managers index data release, France coming in weaker than expected would have been a popular choice. So the fact that French manufacturing weakness has taken the shine off this morning’s data is not too surprising.

Having seen EUR/USD move into oversold territory in the last 48 hours, it is maybe no surprise we have seen a little buying helping it pop back up by 15 pips in this morning’s trading. Without any major surprises from the economic data, it is possible we will once again see this move lower emerge. Only a close above the key $1.35 level would give us cause to reassess this stance.

EUR/USD chart

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