Cable’s direction still unclear after contradictory news

The Bank of England’s meeting on 6 February somewhat overshadowed the NFP for cable given the significance of the announcements then. Although the cut to 4.5% was quite widely expected, the BoE also cut its forecast for growth in half to 0.75% for 2025 while its outlook for inflation rose to 3.7%, much higher than the previous estimate of 2.8%. That the BoE seems to be concerned about stagflation made traders somewhat nervous, but it still seems unlikely for now to see a significant gap in policy open up between the BoE and the Fed this year.

The overall trend for 2025 so far seems to be sideways rather than directional. Recent attempts on the 50 SMA from Bands have failed, which might suggest limited buying pressure, although the price did close the gap from the weekend of 1-2 February very quickly.

With $1.25 as a seemingly strong resistance for the time being, losses seem more likely than gains in the runup to American inflation depending on sentiment and political news. The 20 SMA around $1.237 is a possible dynamic support in the very short term. The main static supports seem to be $1.23 and around $1.218. Apart from American inflation on 12 February, traders are also looked ahead keenly to British preliminary GDP the following day, which is a critical release in the context of the BoE’s last meeting.

This is my personal opinion, not the opinion of Exness. This is not a recommendation to trade.