GBP/USD holds steady around 1.39 awaiting fresh direction from BoE. FTSE rallied 1.7% in the previous session, pushing above 7000. gains could be harder today but the tone remains positive.

GBP/USD looks to BoE, Scottish elections 

GBP/USD is holding steady around 1.39 ahead of several key risk events (FXB, UUP). 

The fishing row with France is escalating as Boris Johnson to dispatch two Royal Navy patrol boats to Jersey 

The impact of the Scottish election is expected to be limited, although the focus is on the likelihood of another Scottish Independence referendum. 

BoE is expected to sound more upbeat regarding the outlook for the UK economy with upward revisions to the quarterly inflation report. 

Where next for GBP/USD? 

GBP/USD trades flat around 1.39 and is struggling for a clear direction. 

It trades below its descending trendline dating back to April 20^th and above its 20 & 50 EMA on the 4 hour chart. The RSI is neutral around 50, pointing higher. However, buyers well be looking for a break over the descending trendline at 1.3935 in order to target 1.40 the key psychological level and high April 20. 

Sellers might look for a move below 1.3850 low May 4, ahead of 1.38 low May 2 and 1.3750 support from mid-April. 

FTSE holds 7000

FTSE futures are pointing to a mildly higher start continuing the positive tone from yesterday as investors digest more corporate earnings and await the BoE. 

The FTSE rallied 1.7% in the previous session, boosted by commodity stocks amid surging commodity prices and cyclicals thanks to the reopening trade. 

Given the strong moves in the previous session today could be a struggle but the tone remains positive. 

Corporate earnings from Next (NXGPF) & Barratt Development (BTDPF) in focus. 

Where next for the FTSE? 

The FTSE powered higher in the previous session hitting fresh pre-pandemic highs. It trades above its 20 & 50 EMA on the daily chart and above its ascending trendline dating back to early February 

The FTSE broke above 7000 the key psychological level, however the price still needs to break above the ascending trendline resistance at 7050 in order to be able to look towards 7400 the pre-pandemic high. 

On the flip side it would take a move below 6900 for near term bullish run to be negated and the bears to gain traction.