GBP/USD analysis: hawkish BOE to keep Pound bid

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

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these securities. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Forex involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.