Sterling eyes MPC votes
The pound has been edging higher ahead of the MPC voting breakdown at 9.30am (London time). Awaiting the announcement, the market is expecting all nine members to vote in favour of keeping rates on hold and for the stimulus package to be kept unchanged at $375 billion, which will prompt short-term buying.
The chances of the voting breakdown coming in different to the expectations are low, but if it were to be different the bias it’s leaning towards is a vote in favour of lowering the interest rate.
As I previously stated, the UK inflation rate is at zero, but if you round it off to two decimal places it is in contraction, and this is cause for concern as the UK is teetering on deflation.
GBP/USD is receiving support at the 100-hour moving average (MA) at $1.4925, and the resistance at $1.50 will be the first target. If that is cleared, last week’s high of $1.5048 will be the next target. A drop below the 100-hour MA will bring $1.49 into sight and then the next level of support will be the $1.4855 area.