Global macro overview for 17/06/2016:
Yesterday, the Bank of England policy makers kept the benchmark interest rate at its record low of 0.5% together with the asset purchase facility at 375bln pounds. Moreover, the policy members voted 0-0-9, just as expected as well. Nevertheless, this data was overshadowed by the BoE fresh warning regarding the uncertainty about the EU referendum next week. The BoE claims that Brexit threats knocking Britain's economic growth, pushing the pound dramatically lower, as well as presents the "largest immediate risk" for global financial markets. If Britons were to vote to leave the world's largest trading bloc, the adverse effect could severely slow down the global economy, the BoE rate setters said. The officials again reiterated that Brexit could lead to inflation, which would increase largely on the back of a dramatic deprecation of the British currency, while the economic growth and labor market would suffer a blow from falling investments. In conclusion, the Brexit is not really welcomed by the BoE policy makers and the overall British economy.
Let's now take a look at the GBP/USD technical picture in the daily time frame. A hammer candlestick formation confirms that the technical support at the level of 1.4012 is the main support level for bulls as they are trying to test the next resistance at the level of 1.4322. Nevertheless, the market is still trading below the 55,100, and 200 DMA, so it could stay within this range until the national referendum results on the 23rd of June, 2016.
