Can the GBPUSD find the buyers? Watching 1.3531 to 1.3543 on the rebound
Finds some profit taking against the natural support level at 1.3500
The Bank of England kept rates unchanged and the number of dissenters remained at two (7-2 vote). Employment concerns continue to keep the central bank on hold despite expectations from market participants that a tightening was potentially warranted. The press conference was ambiguous with Bailey saying that “It was a very close call today”. HMMM. Read Adam’s post here and Justin’s post here.
The price has now fallen steadily from 1.36362 (at the decision time) to the new low for the day at 1.34998 (call it 1.3500). The level is a natural support level. If you go back to September 29, the price did stall against that level, before breaking lower on the same day. So there is some history against the level.
Close risk would be watched around 1.3531 to 1.3543 now (see green numbered circles). The initial move to the downside today did find support near the 1.3531 level. The price bounced up to 1.3562 before rotating back to the downside and through the 1.3531 level.
A move below the 1.3500 level would open the door for further downside with the price action chopped lower and higher on September 29 through October 1 when the price was able to get above and stay above the 1.3500 level again. The low price for the year came in at 1.3411. That was the lowest level since December 23, 2020.
PS the 5 year gilt yield is down over -19 basis points on the day at 0.651%. It traded as high at 0.904% in October.