GBP/USD Forecast: Dovish BOE hits Pound

Valeria Bednarik FXStreet

GBP/USD Current Price: 1.2823

The Bank of England left rates unchanged, although two members voted for a cut.
Governor Carney concerned about employment, the risks of a global economic downturn.
GBP/USD battling to retain the 1.2800 threshold, bearish in the short-term.

The GBP/USD pair fell this Thursday to 1.2793, its lowest since September 24, as the Bank of England surprised with a dovish decision. MPC decided to leave it’s monetary policy unchanged, although two members voted for a rate cut. Governor Carney, in his later speech, flagged the risks of a global economic downturn and warned that a no-deal Brexit would likely result in job losses and business closures. The central bank has kick-started the year with a hawkish view of the economy, with policymakers inclined for a rate hike. This time, it seems they are closer to easing the monetary policy. The never-ending Brexit drama, for sure adds to policymakers’ concerns. The UK won’t release relevant macroeconomic data this Friday.

GBP/USD short-term technical outlook

The GBP/USD pair has recovered from the mentioned low, trading around the 23.6% retracement of its October rally at 1.2820, with a neutral-to-bearish short-term stance. The 4 hours chart shows that the upside has been capped by a bearish 20 SMA crossing below the 100 SMA, while technical indicators stabilised in negative territory. Further declines should be expected on a break below 1.2785, the immediate support.

Support levels: 1.2785 1.2750 1.2720

Resistance levels: 1.2870 1.2910 1.2950

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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