Forex Technical Update
The Bank of England meeting to decide on interest rate policy is on tap for Thursday, 12/8 at 7:00AM EST (12:00GMT). As we start the 12/7 US session, there is bit of a spike upwards for the sterling. The 1H GBP/USD chart is seen to maintain bullish momentum (RSI held above 40 tagging 70 again). Price action stayed mostly above the 200 hour simple moving average and also broke above a declining resistance connecting highs going back to Nov 30. We now have a throwback to test if this breakout can be sustained. If it can, price should go no lower than 1.5640, but preferablly it should respect 1.5660. A confirmation for the upside break opens up the 1.5775 high. Ahead of the BoE meeting, this shoudl probably be the limit for bullish expectation.
The GBP/JPY is in a similar situation. Price action failed to sustain a break below the 200SMA in the hourly chart. Then a break above a projected wedge resistance is now followed by a throwback. A bullish market should not dip below 121.50. Hold above 121.75 would be a stronger sign of a bullish market. This opens up the 122.65 high, again a limit to the bullish outlook for now ahead of the BoE meeting.
Fan Yang CMT is the Chief Technical Strategist FXTimes - provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources