GBP/USD plummets to 1.3160 post-BoE

Pablo Piovano FXStreet

The British pound met a wave of selling orders following the BoE interest rate decision today, dragging GBP/USD to fresh lows in the 1.3160 area.

GBP/USD (very) heavy on BoE

Cable sunk over a cent to the 1.3160 region after the MPC voted 6-2 in favour of keeping the monetary status quo unchanged today vs. market expectations for a 5-3 vote. The Bank of England left intact its key rate at 0.25% and the asset purchase facility at £435 billion.

The BoE has revised lower its inflation forecasts, now seen the CPI at 2.58% within a year and 2.19% in 2-year’s time. Regarding the GDP, the central bank now expects the economy to grow 1.7% this year and 1.6% in 2018.

Market attention should now shift to the press conference by Governor Mark Carney at the BoE’s inflation report.

GBP/USD levels to consider

As of writing the pair is losing 0.41% at 1.3169 and a breakdown of 1.3158 (low Aug.3) would open the door to 1.3124 (10-day sma) and finally 1.3094 (23.6% Fibo of 1.2587-1.3250). On the other hand, the initial hurdle emerges at 1.3266 (2017 high Aug.3) followed by 1.3351 (high Sep.12 2016) and finally 1.3447 (high Sep.6 2016).

In addition, Cable is near overbought levels at 67 when gauged by the daily RSI (14), while the MACD stays on the bullish side for the time being.

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

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