The Bank of England is due to make its latest interest rate decision early in the London session on Thursday with most market participants anticipating that they will keep rates on hold at 3.75% with the voting from MPC members expected to be more clean cut this time around with just two members expected to have voted for a cut and five to keep rates on hold. Given the unlikelihood of a surprise, most traders are expecting to see moves in Cable on the forward guidance given to the market in Policy Report and Summary and later on in Governor Andrew Bailey’s press conference.
Markets are still pricing in further rate cuts later in the year and traders will be looking to see whether we have a ‘dovish hold’ from the MPC or a more ‘hawkish hold’ which should see some strong moves in the currency. The greater risk, and therefore impact would probably come from a ‘hawkish hold’ given the markets expectations for cuts later in 2026, which would see Cable power north. However, a much more dovish outlook could also see a strong move in the pound that could take Cable lower into recent ranges.
Cable is currently sitting towards the top of recent trading ranges and anything more hawkish could see recent highs just below 1.3900 challenged while a more dovish outlook could see a test of the 200-day moving average on the daily chart currently at 1.3426 come into play. As always though, most traders are expecting the even to be good for at least a 50 pip move in the market.
Resistance 2: 1.4000 – Key Psychological Level
Resistance 1: 1.3867 – 2026 High and Trendline Resistance
Support 1: 1.3426 – 200 Day Moving Average
Support 2: 1.3271 – Trendline Support
