BUY STOP at .8455 EUR/GBP (now .8443)At 12:00 today (25 minutes) we shall know what the BOE intend to do about the current round of interest rates.
The market expectation is 0 - 2 - 7.
The first digit is those MPC members who voted to increase rates (no-one expects this to be other than zero).
The second digit is those MPC members who voted for a decrease in rates (the last month saw 2 members vote for a decrease against market expectation)
The third digit reflects the opinion of MPC members who voted to leave rates unchanged.
The most likely print will be 0 - 2- 7 and rates to be held at 5.5% but if we see 0 - 3 - 6 or even 0 - 4 - 5 and we see a rate cut then we can expect a massive move in GBP.
In theory a vote to decrease interest rates and/or a rate cut should be GBP NEGATIVE but this is not guaranteed.
The path of EUR/GBP will be one of 2 ways (see chart) on release of the numbers.
If the market interpret the news as GBP positive (BULLISH) we can expect EUR/GBP to decline rapidly to at least WS1 support at .8400 but this support could easily break.
If the market see the news as GBP negative then I have a BUY STOP placed at .8455 which is a few pips above the 200 EMA on H1.
If this trade triggers then we can expect to see the gap that formed a week last open to close.
However the data comes out at 12:00 be ready for some rapid price moves across all GBP pairs.
Anyone with SHORT or LONG GBP trades will need to tighten stops but remember, spreads will increase by as much as 10 pips, possibly more as the news is announced.
