GBP/USD analysis: rally stalled below key 1.3280

Valeria Bednarik FXStreet

GBP/USD Current price: 1.3247

BOE clears path for an August rate hike, chances up to 68% after Haldane mounts the hike train.
GBP/USD rally could continue Friday on a break above 1.3280 up to 1.3350.

The GBP/USD pair surged from a fresh yearly low of 1.3153 to as high as 1.3269, as the BOE surprised markets positively. Odds for an August rate hike surged to 68% from less than 50% 24 hours ago, after Chief Economist Andy Haldane became the third MPC member to vote for a hike. The central bank offered a confident stance on wage growth, and despite some tepid macroeconomic figures seen these last couple of month, policymakers believe the economy is rebounding after the weak first quarter. Additionally, the MPC reviewed its guidance on the level of Bank Rate at which the MPC will consider unwinding its asset purchase programme, now set at 1.5%, compared to the previous guidance of around 2%. The pair's advance, however, stalled short of the weekly high at 1.3272, and in a wider perspective, the movement seems corrective. The 4 hours chart shows that the pair is above its 20 SMA, which lost downward strength, while technical indicators lost upward momentum after nearing overbought levels, limiting chances of further gains ahead. A break above the mentioned weekly high, however, will encourage bulls and could result in an extension up to 1.3350, the next relevant static resistance area.

Support levels: 1.3205 1.3170 1.3130

Resistance levels: 1.3280 1.3315 1.3350

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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