GBP/USD Forecast: Uneventful BOE leaves pound weakened

GBP/USD Current price: 1.3924

• The Bank of England maintained rates and the APF unchanged in March.
• The greenback rallied as US government bond yields resumed their advances.
• GBP/USD holds above 1.3900 but lacks bullish potential.

The GBP/USD pair hit 1.4001 as the negative dollar’s momentum extended into the Asian session but retreated sharply right after testing it. The pair stabilized around 1.3950 ahead of the Bank of England Monetary Policy decision. As widely anticipated, policymakers decided to leave the benchmark interest rate unchanged at 0.10% and kept the Asset Purchase Facility steady at £895 billion as widely expected. The accompanying statement noted that the pace of purchases “could remain at around its current level initially, with the flexibility to slow the pace of purchases later.”

The same document clarified that if conditions change, policymakers are ready to “take whatever additional action was necessary to achieve its remit.” GBP/USD plunged after an uneventful BOE, as demand for the greenback prevailed, although the pair managed to settle around the 1.3920 level. The UK will publish February Public Sector Net Borrowing this Friday.

GBP/USD short-term technical outlook

The GBP/USD pair, in its 4-hour chart, is trading just below its 100 SMA, which maintains its bearish slope. The 20 and 200 SMA head nowhere below it, with all the moving averages confined to a tight intraday range. The Momentum indicator eases within positive levels while the RSI indicator is stuck around 55. The pair is neutral, with the upside limited by increased selling interest willing to add at higher levels.

Support levels: 1.3900 1.3865 1.3820

Resistance levels: 1.3965 1.4010 1.4050

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