The Bank of England could trigger profit-taking in sterling if it hints at
cutting interest rates Thursday, FXTM says. The BOE is expected to keep its base
rate unchanged at 0.75%, according to a WSJ poll of analysts, so the market's
focus is on whether Governor Mark Carney provides any clues on future changes at
a press conference after the central bank releases its rate decision, meeting
minutes and latest economic forecasts. "Any signs of the BOE indicating an
easing of policy will likely lead to profit taking in the pound which has
rallied more than 700 pips since October 10 [when GBP/USD began the day just
above 1.22]," Hussein Sayed at FXTM says. GBP/USD is last down 0.2% to 1.2916
and EUR/GBP is rises 0.1% to 0.8635.
Forex and stock traders are looking for the consistently wrong investor, trader and take the opposite position. This will obviously lead to winning trades for them. All traders have read trading books that point out that increasing volume is good for the continuation of the trend. Many new stock traders will try and fight the trend.
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