GBP/USD volatile around 1.3050 following the BoE event
- Cable trims earlier gains and returns to 1.3050.
- BoE kept monetary policy unchanged today.
- MPC voted unanimously to keep current status quo.
The Sterling struggles for direction following the BoE steady stance at today’s meeting, motivating GBP/USD to gyrate around the 1.3050 area for the time being.
GBP/USD weekly upside capped by 1.3100
Cable eased from earlier tops after the Bank of England kept the refi rate at 0.75%, the asset purchase facility at £435 billion and the purchase of corporate bonds at £10 billion, all in line with prior surveys.
Furthermore, the MPC voted unanimously to keep the steady stance on monetary policy and the BoE also signaled that it is needed more than a rate hike to keep inflation in check.
From the Inflation Report, the central bank has revised lower its forecasts for economic growth and it now sees the economy expanding 1.5% this year, 1.6% next year and 2.1% in 2021. In addition, the BoE sees consumer prices running above the bank’s target at the end of the forecast horizon.
GBP/USD levels to consider
As of writing, the pair is gaining 0.05% at 1.3055 and faces initial hurdle at 1.3102 (high May 1) seconded by 1.3132 (high Apr.12) and then 1.3196 (high Apr.3). On the flip side, a breakdown of 1.3011 (21-day SMA) would expose 1.2960 (200-day SMA) and finally 1.2865 (low Apr.25).
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.
