Author: Mr. Amar – Technical Analyst
The Bank of England (BOE) is targeting a hat-trick with its third straight rate hike of 25 basis points at its March monetary policy meeting this Thursday. Russia’s invasion of Ukraine has left the central bank in a quandary as it seeks to combat inflationary pressures by maintaining economic growth. The BOE is widely expected to hike the benchmark interest rate by 25 basis points from 0.50% to 0.75% at its March monetary policy meeting, kicking off the third straight meeting. It is not “Super Thursday” as there is no press conference from Gov. Andrew Bailey, leaving markets focused on the composition of the rate hike vote and Bailey and the company’s statement on the policy outlook.
Looking at GBP/JPY, the pair consolidates after the biggest 14-day gains around 156.00 during today’s Asian session. The cross-currency pair is showing the market’s cautious mood ahead of the BoE policy decision as the pair embarks on a four-day uptrend to reverse from the highest levels since late February. Alternatively, the GBP/JPY bulls can wait for fresh monthly highs currently around 156.57 to make fresh entries. Next, a falling trend line from October 2021 and the February high near 157.35 and 158.10 respectively will challenge upside moves.
As for GBP/USD, it is trading on a new high having traded through a swing range between 1.3138 and 1.31438. The high price just hit 1.3148. The cable pair hailed broad US dollar weakness to print a bullish breakout from the short-term falling wedge. However, the mixed sentiment in the market and the fear of the BOE seem to prove the price’s uptrend of late. GBP/USD confirmed a falling wedge bullish formation the previous day which in turn allows the cable pair to renew weekly high on Thursday. Should GBP/USD break above 1.3400, 1.3720 theoretical targets will be in focus. However, multiple February highs around 1.364045 act as another filter to the north.