The big day has finally come. Two central banks announce their interest rate decisions. One is ECB and another is BOE. We have already seen positioning taking place as Pound has been rallying for hours before the event takes place. I am worried that we would not see 'buy the rumor and sell the fact' situation. Current market sentiment is clear. Everybody expects hawkish statements from the Bank of England and maybe neutral from ECB.
I am bullish towards Pound and think it can go to 1.5700 level. I mean gbp/usd pair. Previous double bottom in the pair confirms that. On the other hand, the currency pair is right at resistance and whether it is going to be broken or not remains to be seen. It is possible that traders will wait for Non-farm payrolls tomorrow and only then take firm actions.
Now, what about Euro? Not clear, because most recent data from Euro zone was not very optimistic. So, we are running a risk of hearing pretty dovish comments from ECB president. At the moment I am bullish in Pound and bearish in Euro. Let us wait for a few hours to see the outcome. Be sure to wait till the ECB president Draghi speaks at the conference at 12:30 GMT. I will write an update on all the stuff tomorrow.
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