British Pound Looks for a Lifeline Following Bank of England Minutes

Talking Points:

• Bank of England Minutes from April’s Policy Meeting
• British Pound Falls Against the US Dollar
• BOE sees U.K Economy Growing About 1.0 percent in 1Q, 2Q.

The British Pound slipped immediately following the release of the Minutes from April’s Bank of England (BOE) Policy meeting. Some of the comments from the report are as follows:

• The BOE sees U.K economy growing about 1 percent in 1Q, 2Q. However, they see some slowdown in emerging economics, particularly China.
• The BOE sees risks from widening of U.K. current account deficit, and sees risk that low Euro-area inflation may hinder rebalancing.
• U.K. Recovery building momentum as house prices show considerable momentum, especially in London.
• BOE says recovery strengthening in advanced economies

The British Pound faced resistance and year-to-date highs ahead of BoE minutes, but was unable to breakout higher. Technical Strategist Jamie Saettele had warned that the upside momentum was missing as RSI hasn’t been above 70 since October. Currency Analyst Christopher Vecchio outlined earlier last week the potential of a major breakdown in GBPJPY and GBPUSD.

GBPUSD 5-Minute Chart, April 23, 2014. Charted created using FXCM Marketscope 2.0.

-- Written by David Maycotte, DailyFX Research Team. Questions, comments or concerns can be sent to [email protected].

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