GBP/USD falls back to pre-surprise BoE rate hike levels underneath 1.3300

GBP/USD falls back to pre-surprise BoE rate hike levels underneath 1.3300
Since losing its grip on the 1.3300 level, GBP/USD has been ebbing lower and is now trading in the 1.3270s.
The pair is now back to its pre-surprise BoE rate hike levels.

Joel Frank Independent Analyst

Since losing its grip on the 1.3300 level, GBP/USD has continued to gradually ebb lower and, trading in the 1.3270s, is now all the way back to its pre-BoE policy announcement levels. Recall that the bank surprised markets with a 15bps rate hike on Thursday, sending GBP surging at the time (GBP/USD hit highs in the 1.3370s). Markets had expected the bank to hold off on rate hikes until February of next year given dovish rhetoric from BoE members earlier in the month/at the end of November about Omicron uncertainty.

On the week, GBP/USD is set to close roughly flat, with the pair one again bouncing from support at the 38.2% retracement back from the post-pandemic high (at 1.4250) to the post-pandemic low (at 1.4113), which sits close to 1.3170. It was not just a surprise BoE rate hike that came to GBP/USD’s rescue and prevented a break below the key Fibonnaci level and collapse towards the 50% Fib in the 1.2800s. Markets sold the US dollar in wake of the latest Fed policy announcement on Wednesday, which also gave GBP/USD a lift, despite the bank doubling the pace of its QE taper and indicating three hikes in 2022.

Looking back over the last few weeks, the 1.3370 area has been an important zone of support/now resistance and GBP bears appear to have taken the opportunity here to reload on shorts. If the dollar can continue to nurse a recovery in quiet, low volume pre-Christmas holiday trade next week and if the UK Omicron situation continues to deteriorate, there is no reason why GBP/USD can’t return to 1.3200 or under.

GBP/Usd

Overview
Today last price	1.3278
Today Daily Change	-0.0047
Today Daily Change %	-0.35
Today daily open	1.3325

Trends
Daily SMA20	1.3293
Daily SMA50	1.349
Daily SMA100	1.3619
Daily SMA200	1.3772

Levels
Previous Daily High	1.3374
Previous Daily Low	1.3241
Previous Weekly High	1.3289
Previous Weekly Low	1.3161
Previous Monthly High	1.3698
Previous Monthly Low	1.3194
Daily Fibonacci 38.2%	1.3324
Daily Fibonacci 61.8%	1.3292
Daily Pivot Point S1	1.3253
Daily Pivot Point S2	1.318
Daily Pivot Point S3	1.3119
Daily Pivot Point R1	1.3386
Daily Pivot Point R2	1.3447
Daily Pivot Point R3	1.3519

Author

Joel Frank

Independent Analyst

Joel Frank is an economics graduate from the University of Birmingham and has worked as a full-time financial market analyst since 2018, specialising in the coverage of how developments in the global economy impact financial asset

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