GBP/USD analysis: poised to break below 1.3000

Valeria Bednarik FXStreet

GBP/USD Current price: 1.3046

BOE much more dovish-than-expected, despite pulling the trigger.
Brexit still painting a gloomy future for the UK.

The British Pound entered in an unstoppable selling spiral following the BOE's monetary policy meeting. The Central Bank rose rates by 25bps as expected, reverting the post-Brexit preventive cut, with only two out of nine members against the move. The accompanying statement, however, showed that any future rate hike would be "at a gradual pace and to a limited extent” forecasting only two additional rate hikes in the next three years. Later in his speech, Carney said that "gently rising" rates is consistent with inflation falling back over the next year. The BOE upwardly review its inflation forecast for this last quarter of the year, and revised growth forecast for 2018 to the downside, while acknowledging the risk of Brexit painting quite a dovish picture. The pair fell roughly 200 pips with the announcement and remains near October low of 1.3026, the immediate support. The pair's 4 hours chart supports further declines ahead, as technical indicators barely decelerated their downward momentum once reaching oversold readings, where they stand, after the price broke below all of its moving averages, also below all of the Fibonacci that limited price action this last month.

Support levels: 1.3026 1.2985 1.2950

Resistance levels: 1.3075 1.3110 1.3150

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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