GBP/USD Tests Resistance as BOE Meeting Approaches

The GBPUSD is pushing against the next resistance at the 1.6297 level. Since November 2010, the price has used the 1.6272-1.6297 area as a point of resistance on a number of different occassions. Twice the price extended higher, but only 3 days over the period has the GBPUSD  closed above the level 1.6297 level. Look for profit takers to take advantage of this resistance level. 

The surge higher today on the back of much stronger PMI Services data (57.1 vs 52.6 estimate), has the GBP well supported against all currencies. The BOE meets on Thursday and although the Monetary Policy Committee is expected to keep rates unchanged, the mix of the vote has been slowly moving toward a tightening bias (6-3 is the vote with 6 voting for no change and 3 voting for an increase of at least 25 basis points).  Better data accompanied by high inflation is not a mix the central bank is looking for with CPI inflation at 4.4%, well above the 2-3% target set by the central bank. 

I do not expect a surprise increase on Thursday, but I do wish the BOE would change its stance on not providing the market with more information on their deliberations.   The FOMC has recently announced that four times a year, Chairman Bernanke will conduct a press conference a la his ECB counterpart Jean Claude Trichet.  Even on meetings the Fed Chairman will not speak, the FOMC still releases a one page statement which outlines the  economic activity and inflation as seem by the members along with the vote outcome.   This gives the market full transparency to the decision by those central banks.

With the BOE, they simply announce the decision but do not release the vote or the bias until later in the month.  This month, the minutes will be released on April 20th. What’s with that?  Get with the program and give the market some “color” as to your feelings instead of uncertainty and speculation as to what you truly feel.