BoE stands pat at 0.5% - Cable drifting along sloping trend line

FX:GBPUSD   British Pound / U.S. Dollar
281 0 4
Amid plotting both weekly and monthly charts we have encountered with enough bearish swings with mammoth volumes show the tendency to confer trend line .

Today's highlights of BoE's monetary policy:

Bank of England maintains key UK interest rate at 0.5%. This unchanged rate was no surprise to the forecasts.

BoE's QE in Jan total GBP stays flat at 375 bln GBP vs previous 375 bln GBP.

Sterling has had an awful beginning to the year as it has been talked down by many currency experts which is quite reasonable and politicians warning about risks to the UK economy have not helped the pound's cause.

To begin with Q1 series the pair has broken a strong support at 1.4725

The formation of falling wedge was completed with bearish engulfing candle to break below base line of this pattern to signal even more dips are underway coupled with other bearish indications.

Leading oscillators of all time periods ( RSI and stochastic ) indicate selling pressures. Current RSI is trending southwards at 42.6304 converging with every price dip.

While on slow stochastic curve has reached oversold region but absolutely no scenes of bullish crossover, currently %D line crossover is moving on even below oversold territory.

While the current spot FX is sliding below lagging indicator (21DMA) on all time frames again that signifies these price dips to prevail further in long term.

BOE insist that their decision will be determined by the outlook for inflation .

Given the weakness in crude prices it comes as little surprise that predictions for the first rate hike are slowly but surely being pushed into the latter part of 2016.

Trade recommendation: We recommend buying binary put options for targets of 50-60 pips to reach out at 1.4325 with a stop loss at 1.44 levels, thereby observed handsome risk reward ratio.
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