Booking Profit on EUR/GBP After BOE Sends GBP Higher

Yesterday, we decided to sell EUR/GBP, as the Euro was turning bearish, especially after the FED meeting, while the GBP was stalling after the decline. Yesterday the FED announced the beginning of the taper process in December, while today, the Bank of England (BOE) kept the policy unchanged, but the member votes for the monthly gilt purchases declined from 8 to 7, while two members dissented.

EUR/GBP retraced higher earlier this week, but yesterday, it formed an upside-down hammer candlestick, which is a bearish reversing signal, and today, this forex pair tumbled lower. So, we booked profit, as the BOE is starting to turn hawkish. Below, you can see the BOE decision and statement.

BOE announces its September monetary policy decision – September 23, 2021

• UK Q3 GDP expectations revised down by around 1% since August
• The downward revision reflects the emergence of supply constraints on output
• Estimate of underlying pay growth has picked up, to above pre-pandemic rate
• Uncertainty around labour market outlook has increased
• Questions on how things will be after furlough program ends at the end of Sept
• BOE will deliberate said developments in November
• Inflation to rise further in near-term, to slightly above 4% in Q4
• Central expectation is that current elevated cost pressures will prove transitory
• Existing stance of monetary policy remained appropriate
• Full statement