EURGBP BUY OPPORTUNITY. EVENT TRADING - BoEBank of England (BoE) meeting minutes 12:00 UTC today (2nd August)
Two Catalysts for EUR/GBP
1) BoE will announce its interest rate decision at 14:00 UTC+2 on 2nd of August. Markets are pricing 80-90% implied probability of a rate hike to 0.75% (it is 0.5% now).
From reported economic indicators, the unemployment rate remains glued at 4.25% and wage growth has decelerated compared to latest inflation report from May ( from 2.9% to 2.7%). Core inflation has also surprised to the downside.
Calculating using the futures contracts, markets have priced in the rate hike, therefore there should not be a gap up if they hike. In that case the market would react more on BoE outlook of the economy and economic projections, and there is a chance they will not be as good as markets may expect, as expectations right now are really high, Which gives me grounds to believe that even with a rate hike there is bigger change of a gap up of EUR/GBP (weak GBP) than gap down.
And if they surprisingly do not hike, then than would be a hell gap up omg that would be awesome.. :D
2) You can also see that EUR/GBP is on the up trend and is approaching lower trend line, which is a huge support for this pair. That means that there is a technical catalyst for EUR/GBP to go up.
