(DAILY NOTION) GBP/USD Possible Drop to 1.3600, Next Mover: BOE interest rate

Illustration photo of GBP/USD daily chart from Tradingview

The GBP/USD price is in a tight range as traders shift their focus to the upcoming Bank of England (BOE) interest rate decision. The GBP/USD is trading at 1.3683, which is close to its two-and-a-half high.

Data from the UK showed that the manufacturing sector continued to flourish in January even as most of the country was in lockdown. The important services PMI numbers will come out tomorrow and analysts are less hopeful. They believe that the services sector suffered last month because of the lockdowns. Furthermore, many service providers like restaurants and hotels were forced to close. 

The next major news that will affect the GBP/USD will be the BOE interest rate decision that will come out on Thursday. While the bank will leave rates unchanged, traders will be looking at Andrew Bailey’s statement on interest rates.

On the daily chart, the GBP/USD price has formed an ascending channel. It is above the lower side of this channel. Also, it has moved above the Ichimoku cloud and the 15-day and 25-day exponential moving averages. The RSI has also formed a bearish divergence pattern. Therefore, it seems like a bearish build-up is happening. If it works out, the pair will likely drop to the next support at 1.3600.

FOLLOWME GBP/USD Overall Sentiment (As of 02:50 p.m., Feb 2, 2021).

Short - 51.97%

Long - 48.03%

For information please refer to Crispus Nyaga.