The only thing that matters for the pound today is the results of the meeting of the Board of the Bank of England. Moreover, the probability of an increase in the refinancing rate from 0.25% to 0.50% is extremely high. Last December, the British regulator raised the rate from 0.10% to 0.25%, which led to a long, and most importantly impressive, growth of the pound. Now, it is quite possible that exactly the same thing will happen today and we will witness another whole month of non-stop strengthening of the British currency. However, the December decision came as a complete surprise to everyone, which is the main reason for such a sharp growth of the pound. This time, the market as a whole is ready for an increase in the refinancing rate, and this will not be something unexpected for market participants.

Therefore, such an aggressive reaction is clearly not worth waiting for. Nevertheless, there are suspicions that the results of the meeting will somewhat surprise market participants. After all, the refinancing rate was raised only a month and a half ago, and too little time has passed since then to be able to assess the effect of this decision. A logical step would be to wait at least three months before taking further steps to tighten monetary policy. In this case, the Bank of England might leave everything as it is today, while market participants are already ready by the expectation of rising interest rates. If so, the pound will inevitably lose its position.

Refinancing rate (UK):

It is possible that the main event of not only the week, but the whole of February will be today's meeting of the Board of the European Central Bank, after which plans to tighten monetary policy up to an increase in the refinancing rate will be announced before the end of this year. The actions of both the BoE and the Fed suggest such reflections. And if these expectations are justified, then the euro will begin a fairly long growth. This process may extend for a whole month, right up to the next meeting of the Federal Committee on Open Market Operations. However, if the European Central Bank does not say anything again, but only repeats the words about the need to maintain the stability of economic recovery and the like, then there is no need to talk about any growth of the euro. The trend to strengthen the US dollar will simply resume.

Refinancing rate (Europe):

The EUR/USD pair is moving in a corrective course from a local low of 1.1121, which resulted in the strengthening of the euro by more than 200 points. The local overbought status has already been received, but this did not lead to a reversal. There is currently a stagnation, which is due to the upcoming event. It can be assumed that a new wave of speculation will emerge very soon. The levels of 1.1240 and 1.1335 will act as signal levels, whose breakdown will indicate the subsequent path of speculators.

The GBP/USD pair approached the resistance level of 1.3600, where there was a reduction in the volume of long positions. This led to a price pullback due to the high overbought level. So, an increase in downward interest may occur after the price is kept below the level of 1.3530. At the same time, the prolongation of the upward cycle will be considered after holding the price above the level of 1.3600.