Many central banks have pursued interest rate cut to fight economic downturn caused by the global pandemic, in hope to enhance growth. BoE from the UK decided to further cut down another 0.15% from 0.25% to 0.1%. This move should diminish the value of the pound however, it has failed to achieve that. In fact, that has lifted the cable pair back up to 1.16 from a record low 1.141 yesterday. Likely affected by PM Johnson mentioning “a combination of the measures that we’re asking the public to take and better testing, scientific progress, will enable us to get on top of it within the next 12 weeks and turn the tide.”, hoarding consumer confidence.

On the technical side, the pair could potentially hit the 23.6% Fibonacci retracement acting as a soft resistance at 1.182, providing door for a sell position. Observation from past 2 days trend, it has been floating between the 1.149 and 1.165 level, once contesting lowest at 1.141 and foreseeing it would remain in that channel in the relatively short term. On the other hand, RSI shows a pick up on the demand which contributed to the hike in sterling’s Asia night session.

Pivot point 1.1561
S1 – 1.1328 R1 – 1.1698
S2 – 1.1191 R2 – 1.1931
S3 – 1.0821 R3 – 1.2301
Traders could eye to enter short at near day high 1.163 with stop loss and take profit at 1.18 and 1.151 respectively.

Analyzed by: Mr. Ronald Wu, Independent Analyst