Scope to cut interest rates is limited now
- If we wanted to lower yield curve, lower bank rate would be the best tool
- BOE has a range of policy tools
The pushback on negative rates by the BOE has been clear since the last meeting. As things stand, it is more of an insurance policy as they have the flexibility and capacity to adopt a more wait-and-see approach over the next few months at least.
Further Development
Analyzing the current trading chart of EUR/USD, I found that the buyers got exhausted today and the downside rotation would be probably to correct strong upside movement from this morning.
Mid term trend is still downside and you should watch for selling on the rallies.
Downside targets are set at 1,2035,1,2023 and 1,1985
Key Levels:
Resistance: 1,2080
Support levels: 1,2035,1,2023 and 1,1985
