GBP/USD Forecast: Brexit hopes overshadowed a dovish BOE

Valeria Bednarik FXStreet

GBP/USD Current price: 1.2963

EU Commission President’s von der Leyen said that a trade deal with the UK is still possible.
The Bank of England left the monetary policy unchanged, mentioned negative rates.
GBP/USD holding on to the positive ground but lacks follow-through.

The GBP/USD pair is ending the day with modest losses around 1.2960, although up from a daily low of 1.2864. The Pound got an unexpected boost from EU Commission President Ursula von der Leyen, who said that she believes a trade deal with the UK was still possible despite the “distraction” caused by Boris Johnson’s Internal Market Bill, which helped the pair hit a daily high of 1.2998.

Meanwhile, the BOE announced its latest monetary policy decision. The MPC voted 9-0 to keep rates and QE unchanged, as expected. However, policymakers mentioned negative rates, which spurred some selling around Pound’s crosses. The UK will publish this Friday, August Retail Sales, seen up by 0.4% when compared to July.

GBP/USD short-term technical outlook

From a technical point of view, the GBP/USD pair has a limited bullish potential, but chances of a downward move are even lower. The 4-hour chart shows that the pair is currently developing above a mildly bullish 20 SMA, while below the 100 and 200 SMA, both converging around 1.3130. Technical indicators, in the meantime, remain above their midlines but without directional strength.

Support levels: 1.2915 1.2860 1.2810

Resistance levels: 1.3000 1.3050 1.3095

View Live Chart for the GBP/USD

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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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