BOE Meets Forecast to Raise Interest Rates by 0.50%, But GBP/USD Fails to Rise


 The Pound showed an increase in value on Thursday ahead of the central bank of England's policy meeting in the European session.

The Bank of England (BOE) met the forecast to increase interest rates by 50 basis points to 2.25% at the latest meeting yesterday, but failed to have a positive impact for the Pound to show strengthening.

This is due to the difference in policy makers' views on the value of further interest rate increases compared to the majority agreement as before.

Therefore, the strengthening momentum of the Pound failed to continue and it was traded down again until the end of the New York session when the market saw the US dollar recover from the shock of Japan's intervention in the previous session.

Judging the price action on the chart of the GBP/USD currency pair, the price which initially made a decline after the FOMC meeting saw a drop to its latest low since 1985 trading.

Almost touching the level of 1.12000 which is the latest support zone, the price shows a rebound of around 150 pips reaching a height of 1.13500.

However, the increase was seen to fail to cross the Moving Average 50 (MA50) barrier in the 1-hour time frame on the price chart before the decline was witnessed again to around 1.12500 and the price leveled around that until continuing at the early opening of the Asian session this Friday morning.

Bearish price signals are still being assessed and add to the price's tendency to further decline at the end of the week.

If it succeeds in breaking through the 1.12000 support zone, the latest 37-year low will be recorded again with a drop target of around 1.11000.

However, if there is an increase again, crossing the MA50 barrier will see the price test the high level reached yesterday.

Next, for a clear signal of a change in the bullish trend, the price will push the price towards the resistance zone at the beginning of the week which is 1.14500.

Investors will be cautiously awaiting the release of economic data to evaluate the manufacturing and service sectors in the UK and the United States which will affect the movement of both the Pound and the US dollar.