UK BOE Interest Rate Decision will be the main focus as BOE has decided to wait during the last meeting, but all indications are pointing to a rate cut today in efforts to boost economy after the Brexit vote. If BOE decides to keep rates unchanged (like the last time), we could see some fundamental sentiment change and might start buying GBP in daily trades…
7:00am (NY Time) UK BOE Interest Rate Forecast 0.25% Previous 0.50%
7:00am (NY Time) APT (Asset Purchasing Target) Forecast 435B Previous 435B
7:00am (NY Time) UK Votes Rate (0-0-9), APT (0-0-9)
The Trade Plan
In the extremely unlikely event BOE cuts rate to 0.00%, we´ll sell GBP immediately on a spike trade. Because of the level of this surprise, I think we´ll see a strong trend change for GBP in the next few weeks, so we should SELL and keep a small portion for larger gains… On the other hand, if we get a surprise unchanged decision on the Official Bank Rate, then we should see some buying in the GBP. Although there is still a huge amount of uncertainty over the future of the country, we should see some demand but the key is to get in and out, if you are going to buy.
I´ll be trading this release using my Spike Trading Method, for more information read: https://www.currencynewstrading.com/how-to-get-started-with-news-trading/
I’d recommend to use the Recommended Pairs from above as they are based on my CSM, which should provide the best combination of currency pairs to trade based on better/worse news… of course, you can also trade the default pair: GBPUSD.
Outlook score is derived from market sentiment, focus, and economic indicators for the currency. It represents the long-term trend of the currency and its market perception. In short, a strong Outlook Score means more long-term demand for the currency, and a weak Outlook Score is the opposite.
(From Wikipedia) BOE Interest Rate, or the official bank rate (also called the Bank of England base rate or BOEBR) is the interest rate that the Bank of England charges Banks for secured overnight lending. It is the British Government’s key interest rate for enacting monetary policy. It is more analogous to the US discount rate than to the Federal funds rate. The security for the lending can be any of a list of eligible securities (commonly Gilts) and are transacted as overnight repurchase agreements. When an announcement of the change in interest rates is made this is the rate the Bank of England is changing. Changes are recommended by the Monetary Policy Committee and enacted by the Governor.