All eyes are on the direction of the pound following its sharp decline on the back of the BOE’s policy rate decision
04.11.2022
- U.S. Employment Report
- Canada-Ivey Purchasing Managers' Index
In yesterday’s U.S. trading session, the U.S. dollar surged after the October U.S. Manufacturing PMI, released yesterday, came in at 50.4, exceeding the market forecast of 49.9. The GBP/USD pair fell by approximately 270 pips from 1.1420 to 1.1150. On the 4-hour chart, the price broke below the uptrend that had been in place since late September.From a technical perspective, GBP/USD is currently trading just below the 200-period SMA on the 4-hour chart, so it will be worth watching to see if a rebound occurs during U.S. trading hours.
Following yesterday’s Bank of England (BOE) policy rate announcement, the pound—which saw a 0.75% rate hike in line with market consensus, raising the policy rate from 2.25% to 3.00%—plummeted immediately after the announcement. The GBP/JPY pair fell approximately 340 pips from 168.558 to 165.107.A downtrend developed along the 10-period moving average (MA) on the hourly chart. Since GBP/JPY rebounded during today’s Asian session without touching the 200-period moving average (SMA) on the hourly chart, we will be watching closely to see if a rebound and rise occur during European trading hours.
Today, during European trading hours, we have German manufacturing orders at 16:00, French industrial production at 16:45, remarks by German Bundesbank President Nagel at 17:30, and at 18:30, the UKConstruction PMI, and remarks by ECB President Lagarde; at 19:00, the Eurozone Producer Price Index; at 21:15, remarks by MPC member Pill; and during U.S. trading hours at 21:30, the Canadian unemployment rate and U.S. employment report; and at 23:00, the Canadian Ivey PMI and remarks by Boston Fed President Collins.We will be watching the direction of the pound, which fell sharply following the BOE interest rate announcement.
Author: Keisuke Sakurai
