Bank of England Governor Mark Carney will most likely keep their key interest rate level, as policy makers continue to debate the strength of the economy. In a few hours, the BoE rate decision will likely show that the benchmark will remain at .5 percent, which has not moved since 2009.
The BoE and the Monetary Policy Committee (MPC) agree that the economy is strengthening, but, in central bank fashion, are hesitant to gradual increase rates in fear of adverse economical effects. Carney is focusing on the spare capacity in the economy, and he does not have an immediate interest of hiking rates.
The one-month forward contracts for the Sterling overnight interbank average is pricing in a 25 bps benchmark rate hike by April 2015, while the MPC is firm on unemployment reaching seven percent before entertaining the idea of a rate increase.
Cable has pulled back from its recent up higher after favorable manufacturing and industrial production figures. The trend on the weekly chart, going back five years, shows that price action has seen some considerable resistance near 1.6800. However, price action still remains within the ascending channel.
1.6800 will be act as a psychological barrier, which traders seem to focus around price levels with double-zeros or round numbers. If this level can be taken out, 1.6830 will be the only barrier against a GBPUSD ascent to 1.7042. This level represents the five-year high and corresponds to the top of the resistance trend line.
Weekly support levels are seen at 1.6620 and 1.6465.