28 out of 30 economists polled by AFX news expect the ECB to raise rates by a quarter point in March after last week’s no change vote. Meanwhile, further speculation in the weekend press suggests that the UK will find it difficult to continue meeting growth expectations without a little help in the form of a rate cut in the next few months, so I am still sceptical over the rally in GBPEUR. The BOE are meeting on Thursday, and we’re expecting another no change for now. However, data released on Wednesday including Industrial and Manufacturing production could affect the MPC decision.
The dollar rallied despite weaker than expected non-farm payroll data, and we are approaching important support levels on cable and EURUSD.
GBPEUR – Support 1.4600, 1.4500
Resistance 1.4735 1.4815
GBPUSD – Support 1.7550, 1.7512, 17400
Resistance 1.7640, 1.7715, 17800
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