GBP/USD Pinned Near 1.3400 After US CPI, BOE Rate Decision
The British Pound is holding steady just below 1.3400 for the eighth consecutive session despite the recent gauntlet of economic events.
GBP/USD has been driven primarily by the Bank of England’s policy decision today. The BOE cut its key interest rate by 25-bps to 3.75% in a narrowly split 5 to 4 vote, marking the fourth reduction this year as inflation continues to slow and the labor market cools. Governor Andrew Bailey and the MPC struck a cautiously accommodative tone, noting that future cuts would depend closely on inflation and economic data, which limited the extent of sterling weakness. The British Pound recovered from earlier losses following the announcement as markets balanced the expected cut with somewhat more conservative guidance from policymakers.
GBP/USD Daily Price history
In the above chart, GBP/USD rates have started to funnel between two important technical areas: resistance in the form of the October swing highs, 1.3471 to 1.3527; and support in the form of the November 21 and December 17 swing lows, 1.3312 to 1.3340. Ultimately, a triangle can break in either direction, and the prevailing trend of U.S. Dollar weakness, coupled with a positive momentum profile, suggests the recent rally by GBP/USD rates may not be finished. Bulls may prove to be vindicated above 1.3527 while bears might feel more comfortable below 1.3312.
Trading forex requires an account with a forex provider like tastyfx. It’s important to manage your risks carefully as losses can exceed your deposit. Ensure you understand the risks and benefits associated with trading leveraged products before you start trading with them.