- The cross-party talks are likely to break the Brexit deadlock.
- All eyes on the BOE’s monetary policy committee (MPC) decision and press conference by the BoE’s Carney.
With the recent headlines suggesting sooner end to the Brexit deadlock, GBP/USD is on the bids around 1.3055 ahead of the London open on Thursday.
In addition to the BBC news report conveying the UK PM Theresa May’s expectations of Brexit before October 31, The Times also reported that PM May is ready to abide by the EU custom norms after Brexit, the opposition party demand which was stuck. With this, cross-party talks are likely to move forward and the same could offer easy transition of Mrs. May’s proposal through the parliament.
Given the recently positive Brexit developments, traders gave little importance to the Fed Chairman Jerome Powell’s press conference on Wednesday that triggered broad US Dollar (USD) rally. Fed’s Powell avoided signaling catalysts for a rate cut and praised economic conditions during his appearance after the FOMC.
Looking forward, today’s monetary policy meeting, minutes and the quarterly inflation report (QIR) from the Bank of England (BOE) together constitute “Super Thursday”.
While the central bank isn’t expected to alter its present monetary policy with key bank rate at 0.75%, the focus will be more on quarterly economic projections and Governor Mark Carney’s press conference. The UK central bank revised down its Q1 2019 and 2020 inflation and growth forecasts during latest release.
Given the recent positive data and progress over the Brexit, chances of BOE’s Carney to present an upbeat statement seem brighter. However, inflation is still lagging behind the 2.0% target and the Brexit is also away from total clarity.
While 100-day and 200-day simple moving average (SMA) near 1.2975 and 1.2960 acts as important downside supports, 1.3000 round-figure may limit the quote’s nearby declines. Also, April lows near 1.2865 shouldn’t be missed on the break of 1.2960.
On the upside, 50-day SMA level of 1.3105 and 1.3130 could be considered as adjacent resistances ahead of targeting 1.3200 and 1.3270 during further advances.