GBP/USD analysis: no BOE rate hikes in the near horizon
GBP/USD Current price: 1.3515
- BOE left its monetary policy unchanged, downgrades growth and inflation forecasts.
- A weaker dollar prevents the pair from dismantling in the near term.
The GBP/USD pair fell to a fresh 4-month low of 1.3459 on the back of BOE's monetary policy decision and another batch of soft UK data. Industrial Production was up by just 0.1% in March, while Manufacturing Production in the same month fell 0.1%, better than the 0.2% slide expected, but still indicating that economic growth keeps decelerating. Also, the NIESR GDP estimate for the three months to April posted a modest 0.1%, below the 0.3% forecasted. As for the central bank, it left rates unchanged, and offered a dovish stance, as policymakers are concerned about "whether the softness in Q1 might persist." Furthermore, inflation seems to be decelerating at a faster-than-expected pace, as the bank cut inflation and growth projections for this year and the next, reducing the odds for a rate hike in H2 of 2018. Dollar's broad weakness prevented the pair from falling further. Heading into the Asian session, the pair presents a neutral-to-bearish stance for the short-term and according to the 4 hours chart, as it is developing below a flat 20 SMA, while technical indicators have bounced from their daily lows, but remain well below their midlines. The scale leans to the downside for the upcoming sessions, with a break below 1.3445 probably seeing the decline accelerating in spite of dollar's weakness.
Support levels: 1.3480 1.3445 1.3410
Resistance levels: 1.3520 1.3560 1.3600
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.
