GBP is pressed after BOE, stocks surged due to Biden's plan

GBP is pressed after BOE, stocks surged due to Biden's plan

Latest news

  • The Bank of England held a meeting yesterday. The statement was more dovish than expected: there were no policy changes and no new hints about future rate hikes. Only one member voted for reducing bond buys and no other members joined him. After that, GBP/USD dropped to 1.3900.
  • Joe Biden with a bipartisan group of senators proposed to spend $579 billion to fund improvements to roads, airports, and infrastructure for electric vehicles. As a result, stock indices such as S&P 500 (US 500), Nasdaq 100 (US 100), and others hit record highs.
  • Brent oil (XBR/USD) reached $75.00 a barrel amid the global economic recovery. Traders await for OPEC+ meeting next week that may lead to a supply increase.

Technical outlook

EUR/USD keeps attacking the resistance level of 1.1950. If it finally manages to break it, the way up to the 200-day moving average of 1.200. will be open. On the flip side, the move below the 1.1900 support will press the pair down to Monday’s low of 1.1840.

EURUSDDaily.png

Gold is moving back and forth between $1770 and $1800. The Fed’s plans to cut bond buys in the coming months lifted the US dollar and thus pressed down gold. The long upper shadows of the last candlesticks signal that bulls (buyers) were trying to push the price higher, but by the end of the session more bears (sellers) appeared and higher prices were rejected. Thus, gold is likely to fall further. The move below the 61.8% Fibonacci retracement level of $1770 will press gold down to the 78.6% Fibo levels of $1735. Resistance levels are $1800 and $1825.

XAUUSDDaily.png

GBP/USD has reversed up from the 1.3900 support. Now it’s getting closer to the 50-period moving average of 1.3950, which it’s unlikely to cross on the first try as it has failed to break it a few times before. Besides, the hawkish Fed and dovish Bank of England are likely to press GBP/USD down. The move below 1.3900 will open the doors to the low of June 22 at 1.3865.   

GBPUSDH4.png

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