GBP/USD, EUR/GBP, USD/CAD – Pound Dips after BoE Decision, EUR/GBP and Canadian Dollar Remain UnchangedThe Bank of England held rates at 0.75%, but there was some surprise as the vote was not unanimous, as in previous rate decisions. This has pushed the pound lower. The Canadian dollar and EUR/GBP are flat.
GBP/USD has posted losses for a fourth straight session. In Thursday’s North American session, the pair is trading at 1.2819, down 0.28% on the day.
Bank of England Holds Rates
As expected, the BoE maintained the benchmark rate at 0.75%, where it has been pegged since August of 2018. The vote was significant, as two of the nine MPC members voted to immediately cut rates. Although the economy has not been doing well, the bank was not in a position to trim rates, with the Brexit turmoil and an election in December. However, this could prove to be a case of simply delaying the inevitable. A report from Rabobank, the second-largest bank in the Netherlands, said that the bank expects the BoE to lower rates twice in 2020, due to weak economic conditions.
GBP/USD continues to move lower this week. The pair broke below support at 1.2870 on Wednesday and tested support at 1.2810 in the European session. If this line breaks, the pair has significant room to move lower, as the next support level is at 1.2720.
USD/CAD is trading sideways in Thursday trade. In the North American session, the pair is trading at 1.3187, up 0.01%.
Ahead – Canadian Employment Data
Traders should be prepared for possible volatility from USD/CAD on Friday, with the release of key employment reports. The employment change indicator is projecting 14.7 thousand new jobs, while the unemployment rate is expected to remain at 5.5.%.
USD/CAD has been range-bound in November, as the pair has been unable to sustain much movement in either direction. However, the round number of 1.3200 is under pressure in resistance and could be tested before the end of the week. This is followed by resistance at 1.3225. On the downside, the 50-EMA is just below the pair, at 1.3155. This line could provide support in the short-term. Lower, we find support at 1.3095.
EUR/GBP is flat in Thursday trade. In the North American session, the pair is trading at 0.8612, up 0.01% on the day.
EUR/GBP has been range-bound since mid-October, so the pair is due for a breakout. In the meantime, I would counsel patience until a trend emerges. On the downside, the round number of 0.8600 is an immediate support level and remains vulnerable. This is followed by support at 0.8500. On the upside, there is resistance at 0.8700.