GBP/USD Forecast: waiting for the BOE

The GBP/USD pair trades around 1.2260, after printing a fresh 2-week high of 1.2308 on broad dollar weakness late Wednesday, retreating further from the high after London's opening an ahead of BOE's monetary policy meeting. The UK Central Bank is largely expected to maintain the policy unchanged, with speculative interest focusing on the Minutes of the meeting, searching for clues on what's the take about the continued advance in inflation, moreover after the latest report showed a setback in wages. A still inflation-tolerant Central Bank will likely weigh on the Pound. Also, investors will be looking for comments about the imminent Brexit, now that the bill has passed the Congress and PM May is ready to pull the trigger this March.  

In the US, and during the American session, focus will turn to weekly unemployment claims and February housing data.

Technically, the 4 hours chart shows that the pair is struggling around a major Fibonacci level, the 61.8% retracement of the January rally. The same chart shows that the 20 SMA heads north well below the current level, providing a dynamic support around 1.2210. Technical indicators in the same chart hold within positive territory, but easing modestly, indicating limited buying interest rather than suggesting an upcoming downward move.

A downward acceleration through 1.2250 should see the pair extending its decline towards 1.2200/10, while below this last, 1.2160 is the next bearish target. Should the pair recover the upside, it needs to surpass the mentioned high to be able to extend its advance up to 1.2345, February low and the 50% retracement of the mentioned daily run.

View live chart of the GBP/USD