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December 16, 2021

Is It Time For The Pound To Rally Again?

Frank Cabibi

12/16/2021

Pound pairs are up as much as 0.49% on the day after the Bank of England reported a 0.15% rise in interest rates to 0.25% this quarter.

Our outlook

This increase in interest rates is very bullish for the pound as well as the continuation of the same amount of asset purchases. The BOE also will try to keep their 2% inflation target which is pretty good when compared to the other major currencies. So, higher rates and low inflation could be a good combo for the bulls.

Trade Setups

GBPUSD

GU showing some rejection from resistance on the 1D chart after jumping on the official bank rate news. Price is now up against resistance on the 1D chart around 1.33581.

GBPJPY

GBP/JPY broke above a falling trend line on the 1D chart. Price got rejected on the 200 DMA and crossed back under the falling trend line which could suggest a false breakout. The pair may come back up to test the moving average combined with resistance around 152.400s.

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