FOMC released some pressure of the markets but as we can see in the calendar, that was just a warm up for the “Interest Rates decisions Thursday” that we are experiencing today. One of the banks that was deciding about the monetary policy was BoE. We did not expect any changes and that is what we received from them. First reaction on the market was the GBP being much stronger, which is actually a reaction on the more hawkish approach among MPC members. Even though this short-term drop is against our mid-term view on this instrument and the EURGBP as overall, it does not deny the signal here yet, which now can be actually used with a better (lower) prices.
We chose the EUR/GBP because the buy signal is relatively still fresh here. Signal was created few days ago but just yesterday it was confirmed to buy the hammer candlestick bouncing with the long tail from the upper line of the symmetric triangle formation. In addition to this, we can see that at the end of February we also managed to defend the long-term up trendline and avoid creation of the Head and Shoulders pattern (inside the triangle). After that bounce, the price went up sharply creating usually nice bullish candles.
Sentiment is positive and as long as we stay above the 0.865 (which is currently under the pressure) the buy signal is present. The closest resistance is 0.884 but with the bullish breakout from the this triangle we should get much higher than this.