Bank of England raises interest rate by 0.25%, but pound’s gains do not continue【May 12, 2023】
Fundamental Analysis
Major U.S. Stock Indices Split Direction, Dow Jones Continues to Fall, Nasdaq Rises
Bank of England Raises Interest Rates by 0.25%; Two Members of the Board of Governors Leave Rates Unchanged
BoE Governor Comments on Rate Hike Halt if Inflation Slows
PacWest Bancorp Shares Plunge on U.S. Land Bank Issues, No Conclusion in Sight
Bitcoin Continues to Fall as G7 Discusses Tighter Regulations; USD 26,000 Near
Technical Analysis
In the currency markets, the dollar and the yen have strengthened, with the dollar losing direction. Meanwhile, the pound sterling has fallen sharply by more than 80 pips after the announcement of the interest rate hike, as selling pressure increased. The pound-dollar has been holding slightly lower at the support line by the round number of $1.25.
Pound Sterling-Yen (GBPJPY)
Analyzing the daily chart of GBPJPY. The pair has fallen below JPY 168.980, which had been an important support line. It is below the recent low, confirming that the upward trend has ended and turned to a downtrend. Near-term risk is considered to be to the downside. The target price is expected to be around 166.950 yen, which corresponds to 38.2%.
Estimated rangeJPY 166.630 – JPY 169.580Resistance lineJPY 168.85Support lineJPY 167.37
Bitcoin (BTCUSD)
Bitcoin is also softening. A major factor is the debate over tighter regulation of virtual currencies. The price had been rising as a safe-haven asset, but the risk to the virtual currency itself has prompted profit-taking selling.
The price has fallen below the USD 27,000 level and is expected to reach a milestone resistance level around USD 25,780.
Estimated rangeUSD 25,780 – USD 28,200Resistance lineUSD 27,640Support lineUSD 26,390
GOLD (XAUUSD)
Gold is also down for the second day in a row. The price has been temporarily rising on the speculation of a halt in interest rate hikes, but is now being held back by selling pressure in the highs. After all, the upside is very heavy above the USD 2,050 level.
Although there are not enough materials to push the price higher at present, the next risk factor could cause the price to rise with stop-losses. We would be cautious in the selling direction due to the smoldering risk of U.S. regional banks.
Estimated rangeUSD 1985.7 – USD 2043.9Resistance lineUSD 2,030Support lineUSD 1,996
Today’s Important Economic Indicators
Economic Indicators and EventsJST (Japan Standard Time)UK GDP15:00University of Michigan Consumer Confidence Index23:00
*Trading advice in this article is not provided by Milton Markets, but by Shu Fujiyasu Jr., a certified technical analyst.
Risk Disclaimer
This analysis is for educational purposes only and does not constitute investment advice. Trading forex and CFDs involves significant risk and may not be suitable for all investors. Past performance is not indicative of future results.
This analysis is for educational purposes only and does not constitute investment advice. Trading forex and CFDs involves significant risk and may not be suitable for all investors. Past performance is not indicative of future results.
