Sterling awaits BoE minutes
The pound is still pushing higher against the dollar, and today’s trading session will be see increased volatility as the BoE will release its minutes at 9.30am (London time) while the Fed announcement is due at 7pm (London time).
The market is expecting no change to the voting breakdown for both the interest rate decision and the size of the bond buying scheme, and we expect to see 0-0-9 across both. The UK has rebounded from deflation, and that that has lifted the weight off of GBP/USD, but the US is still leading the interest rate race.
The currency pair has been in an upward trend since mid-April, and the crossing over of the 50-day moving average over 100- and 200-DMA adds to the bullish sentiment.
The target is $1.58, and any pullbacks will find support in at $1.5545.