18.03.201611:08 Forex Analysis & Reviews: Global macro overview for 18/03/2016

Global macro overview for 18/03/2016:

Yesterday, the Bank of England left the interest rate on hold at the level of 0.50%, together with unchanged asset purchase facility at the level of 375B pounds. The BoE members voted unanimously 9 to 0 in favor of unchanged interest rates. It was the second month in a row when policy makers were unequivocal on the decision, after Ian McCafferty abandoned his rate hike vote in February referring to a weaker outlook for wages. Moreover, according to the Monetary Policy Committee meeting minutes, despite the global headwinds, policy members are still convinced that in the near future interest rates should be increased, not decreased, so negative interest rates are not taken into account currently. There is one more thing worth of noting here: uncertainty over the outcome may result in slowing the economy during months ahead of the vote, the BoE policy members said. In conclusion, The BoE meeting minutes mark the first time when officials have explicitly expressed their concerns over looming referendum risks acting as a further drag on growth amid already challenging global environment.

Let us now take a look at the daily time frame of the GBP/USD pair. The market has clearly broken out above the golden trend line and now is trying to extend the bullish momentum even further by testing the recent swing high at the level of 1.4668. The next resistance is seen at the level of 1.4578 and the next support is seen at the level of 1.4438.