GBP/USD plummets to 1.3100 mark on BoE's 8-1 rate hike vote distribution

GBP/USD witnessed a dramatic turnaround after the BoE announced its policy decision.
The 8-1 vote distribution to hike rate disappointed investors and weighed on sterling.
Hopes for diplomacy in Ukraine undermined the safe-haven USD and might limit losses.

Haresh Menghani FXStreet

The GBP/USD pair plunged over 100 pips from a near two-week high and refreshed daily low, around the 1.3100 mark after the Bank of England announced its policy decision.

As was widely expected, the UK central bank raised its key rate by 25 bps to 0.75% at the end of the March policy meeting this Thursday. This marked the third straight hike in as many meetings, though the 8-1 vote distribution disappointed investors and prompted aggressive selling around the GBP/USD pair.

Moreover, the markets had priced in 40% chances of a 50 bps rate hike. This, along with the uncertain outlook in the wake of Russia's invasion of Ukraine and growth concerns, further weighed on the British pound. This, in turn, was seen as a key factor behind the GBP/USD pair dramatic intraday turnaround.

That said, the optimism over a possible diplomatic solution to end the war in Ukraine continued weighing on the safe-haven US dollar. This should hold back bearish traders from placing aggressive bets around the GBP/USD pair, warranting caution before confirming that the recent bounce from the YTD low has run its course.

Market participants now look forward to the US economic docket, featuring the release of the Philly Fed Manufacturing Index, Weekly Initial Jobless Claims and Industrial Production data. This, along with the broader market risk sentiment, might influence the USD price dynamics and provide some impetus to the GBP/USD pair.

Technical levels to watch

GBP/USD

Overview
Today last price	1.3113
Today Daily Change	-0.0036
Today Daily Change %	-0.27
Today daily open	1.3149

Trends
Daily SMA20	1.3309
Daily SMA50	1.3458
Daily SMA100	1.3432
Daily SMA200	1.361

Levels
Previous Daily High	1.3156
Previous Daily Low	1.3034
Previous Weekly High	1.3246
Previous Weekly Low	1.3028
Previous Monthly High	1.3644
Previous Monthly Low	1.3273
Daily Fibonacci 38.2%	1.311
Daily Fibonacci 61.8%	1.3081
Daily Pivot Point S1	1.307
Daily Pivot Point S2	1.2992
Daily Pivot Point S3	1.2949
Daily Pivot Point R1	1.3192
Daily Pivot Point R2	1.3235
Daily Pivot Point R3	1.3314

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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