The Bank of England (BOE) met expectations to raise interest rates by 50 basis points at the central bank's policy meeting yesterday to 1.75% in the biggest increase since 1995.
Following the decision of the meeting, the BOE will be the first central bank to sell part of the government bonds accumulated in the past central bank policy violation program with 40 billion pounds ($49 billion). The sale is expected to start next month.
The market has seen a significant drop in the value of the Pound after the results of the meeting were announced yesterday and further price movements will be monitored at the end of the week.
Meanwhile, the US dollar currency showed a weak movement on Thursday yesterday despite the market sentiment being assessed as risky with concerns over the risk of a global economic recession continuing to surround the market.
The focus will be on the release of the United States (US) NFP employment data report in the New York session shortly, which will have a big impact on the movement of the US dollar in trading in the last session.
Pay attention to the price movement on the chart of the GBP/USD currency pair, the price was initially seen to make an increase yesterday testing the resistance level at 1.22000 before the BOE meeting results resulted in a significant price plunge with a daily decrease of around 150 pips.
However, the price is seen to bounce back above the 1.21000 zone to close the end of the New York session trading around the 1.21600 level.
The slow price movement continued in the Asian session this Friday morning hovering around the Moving Average 50 (MA50) level on the 1-hour time frame of movement on the GBP/USD chart which investors will evaluate for further price movement indicators.
However, with the pattern of yesterday's price plunge, the price drop is expected to continue at the end of this week and will once again test the support zone at 1.21000 which managed to contain a more severe price drop throughout the week.
If the price manages to penetrate the 1.21000 level, the price will shrink lower until it retests the 1.20000 support zone to record the latest weekly low.
On the other hand, if the price shows a strengthening, the 1.22000 barrier level will be tested and likely to be broken before the price continues its rise and after passing the MA50 barrier as a bullish trend change signal for the price movement.
The continued increase in prices is expected to lead to the high level of 1.23000 which is an important resistance zone after the price increase that occurred at the beginning of the week was seen to fail to pass that level.
