GBP/USD Forecast: strength beyond 1.3300 mark to add fuel to hawkish BoE-led bullish momentum
|The British Pound turned out to be one of the strongest major currencies on Thursday, with the GBP/USD pair rallying over 150-pips after the BoE's latest monetary policy update. As was widely expected, the UK central bank left interest rates on hold but the hawkish surprise came from the MPC vote count, which raised odds of an August rate hike and triggered a sharp short-covering bounce from over 7-month lows touched before the announcement.
Adding to this, the Committed also changed its guidance for unwinding the asset purchase program and now believes to sell the government bonds when the policy rate reaches 1.5% as compared to the 2% projected earlier. The post-BoE upsurge got an additional boost from a modest US Dollar retracement from 11-month tops following the release of weaker than expected Philly Fed manufacturing index.
The pair built on its overnight strong gains and climbed to weekly tops during the Asian session on Friday. In absence of any major market moving economic releases, either from the UK or the US, a follow-through up-move, led by some fresh technical selling, now looks a distinct possibility.
Currently trading around the 1.3270-80 region, the 1.3300-10 area, representing 61.8% Fibonacci retracement level of 1.3447-1.3102 downfall could act as an immediate hurdle, above which the pair seem all set to aim towards challenging the 1.3380-85 support zone en-route the 1.3400 handle.
Alternatively, any meaningful retracement slide now seems to find immediate support near the 1.3235-30 region, 38.2% Fibonacci retracement level, which if broken could accelerate the fall back towards the 1.3200 handle. A subsequent weakness below the mentioned support might negate prospects of any further near-term recovery and turn the pair vulnerable to resume with its prior depreciating move.
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