Forex Trading Signals by Magister Pips, 2012/02/09
0700 UK Interest Rate Decision - (unanimous to hold at 0.5%) 56
Affliated Reports:
UK Asset Purchase Facility (325B exp, 275B prior, 275B to 350B range) 50
All 56 analysts polled by Bloomberg expect the BOE to again hold rates steady at 0.5%, however
there is an expectation that the BOE will raise the APF by 50 Billion from 275B to 325B. In
fact 15 out of the 50 expect the BOE to hike APF by 75 Billion to 350B, while 34 expect just
a 50 billion hike to 325. Only 1 analyst expects the BOE to hold steady at 275B. On October
6th the BOE hiked 75 Billion from 200B to 275B and the GBPUSD moved down some 200 pips. Today,
on a confirmation of a hike in APF there should be some initial downward price action. IF they
do a full 75B hike then this will be more extended but the median estimate if for just 50B so
not sure the move down will be that great, but it should move down on confirmation of this
estimate. If they do not hike APF then Pound Sterling Forex Pairs should rally. On October 6th
after the big sell-off the pair did recover and turned around to rally the rest of the month,
moving from the 1.5270 low all the way to 1.6150 by Octber 27th. The initial reaction should
be for the Pound to sell off, but longer term the extra cash should help stimulate the economy
in theory which would be a good thing.
if they don't hike APF, GBPUSD should rally 40 or more pips
if they lower AFP by 50B, GBPUSD should drop 30 or more pips <- however this is median estimate
so if there is not immediate follow thru do not wait for it to move lower.
if they lower AFP by 75B or more, GBPUSD should drop 60 or more
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