GBP/USD Technical Analysis: Awaiting BoE Policy
All traders' focus today will be on the Bank of England's announcement of its monetary policy, especially after the recent and rapid developments of the Brexit process, which ended in early elections on December 12 to end the political stalemate that plagued the country after Boris Johnson failed to pass the latest Brexit agreement with the European Union through the Commons’ Council. Ahead of the bank's decision, the GBP/USD pair moved in a corrective performance down to the 1.2837 support at the time of writing, with the US dollar gaining amid optimism that a comprehensive agreement could be signed between the world's two largest economies later this month. This will be positive for the US economy and for the dollar.
At the weekend, the White House reiterated its focus on finalizing the "first phase of the deal," agreed in principle with China on October 11, which could prevent a new round of US tariffs on imports from China scheduled for Dec. 15. Trump is thought to be keen to suspend the trade war at least until after the November 2020 elections, so if an agreement is reached in the coming weeks, it could help launch a European economic spring sometime next year.
The results of opinion polls from the UK about who will win the next election will have a strong impact on the performance of the pound against other major currencies, especially if the desire of voters shift away from the Conservative Party.
According to the technical analysis of the pair: On the daily chart, any move for the GBP/USD below the 1.2800 support, will be an opportunity for a stronger bearish correction to the 1.2740 support and 1.2680 respectively. On the other hand, bulls are still betting on the 1.3000 psychological top to move the pair to stronger record levels.
As for the economic calendar data today: All focus will be on the Bank of England's monetary policy decisions on the interest rate, asset purchase plan and the vote on what will be adopted today. Bank Governor Mark Carney's press conference will also be of importance to Sterling's sentiment. From the United States, jobless claims will be announced.
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