GBP: Extending rebound ahead of BoE policy meeting – MUFG

💡 DMK Insight

The Pound’s strength signals a potential shift in market sentiment ahead of the Bank of England’s meeting. With EUR/GBP breaking below the 200-day moving average at 0.8650, traders should be cautious. This level has historically acted as a key support point, and its breach could lead to further downside for the Euro against the Pound. If the Bank of England hints at tightening measures, we might see the Pound rally further, potentially targeting resistance levels around 0.8700. Conversely, if the meeting results in a dovish stance, the Pound could quickly reverse, making it essential to monitor the central bank’s language closely. Look for volatility in both GBP and EUR pairs, especially if economic indicators or geopolitical events unfold. The immediate focus should be on the Bank of England’s decision and any forward guidance they provide, as this could set the tone for the next few weeks. Keep an eye on the 0.8650 level; a sustained move below could trigger further selling pressure in EUR/GBP.