GBP/USD extends gains, rises to 1.3270

The pound jumped after Bank of England’s decision and consolidated gains.
BoE kept rates at 0.50% as expected but three MPC members asked for a rate hike.
Cable extended gains on the back of a weak US Dollar, approaching 1.3300.

Matías Salord FXStreet

The GBP/USD pair rose more than 150 pips from the daily low. Earlier today bottomed at 1.3100, the lowest since November. After the BoE decision climbed above 1.3200 and then, a weak US dollar boosted the pair further to the upside.

Recently it printed a fresh daily high at 1.3270, the highest level since Tuesday. It was hovering around 1.3250/60, consolidating important daily gains.

The pound is among the top performers on Thursday on the back of BoE policy expectations that changed after the 7-2 vote at the MPC and the comments regarding when to consider changes to the purchase program.

“The GBP appreciated and Gilt yields rose across the curve on the hawkish signals from the Bank of England. The market is now pricing in above 65% probability of a rate hike in August (17bp priced) compared with around 45% probability prior to the announcement, while a November hike is now almost fully priced in. Prior to the announcement, the next rate hike was priced to arrive in February 2019”, said Danske Bank analysts.

GBP/USD Levels to watch

To the upside, the immediate resistance is seen at 1.3270 and then at the 1.3300 area. On the flip side, short-term support levels might now be located at 1.3215 (June 20 high), 1.3145 (June 19 & 20 low) and the 1.3100 zone.

Author

Matías Salord

FXStreet

Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.

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