GBP/USD analysis: hawkish BOE to keep Pound bid

Valeria Bednarik FXStreet

GBP/USD Current price: 1.3591

The GBP/USD pair surged to its highest since the Brexit vote back in June last year, hitting 1.3615 and settling not far below it, as hawkish surprises kept coming from MPC members. Following BOE monetary policy announcements on Thursday, in which most policymakers agreed that some withdrawal of monetary stimulus is likely to be appropriate over the coming months, MPC Vlieghe, a well-known dove said on Friday that a rate hike is possible for the coming months, and that more than one hike could be needed. The pair soared with the news, accumulating roughly 470 pips in the last two days of the week, and remained bid after disappointing US macroeconomic figures. Further gains seem likely now that the market is pricing in a rate hike for November, but a downward correction, or at least some consolidation could be expected at the beginning of the week. Technically, daily indicators maintain their strong bullish momentum, despite being in overbought territory, whilst the 20 DMA turned sharply north far below the current level, all of which supports an expected continuation. In the 4 hours chart, technical indicators also head higher within extreme overbought territory as the price develops well above a bullish 20 SMA, this last some 250 pips below the current level.

Support levels: 1.3560 1.3525 1.3480

Resistance levels: 1.3615 1.3650 1.3690

View Live Chart for the GBP/USD

Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

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