GBP/USD: the pound received a boost from the Bank of England
Current trend
The British pound is trading mixed against the US currency during the morning session, consolidating around 1.3320 amid most of the long profit taking.
The day before, the instrument showed steady growth and updated local highs from November 24, which was the market's reaction to a rather unexpected increase in rates by the Bank of England. Citing high inflation, which reached 5.1% in November on an annualized basis (after rising 4.2% in October), the regulator announced an increase in the key interest rate to 0.25%, and the decision was made almost unanimously (8 votes against 1).
Thus, the Bank of England became one of the first major central banks in the world to take this step. In addition, the British regulator decided to maintain the volume of UK government bond purchases at 875B pounds. In turn, the US Federal Reserve, which held a meeting the day before, only announced acceleration in the pace of curtailing the quantitative easing (QE) program.
Support and resistance
In the D1 chart, Bollinger Bands are reversing horizontally. The price range is expanding but it fails to conform to the surge of "bullish" sentiments at the moment. MACD grows, preserving a stable buy signal (located above the signal line). Stochastic keeps its upward direction but is rapidly approaching its highs, which reflects the risks of overbought GBP in the ultra-short term.
Resistance levels: 1.3350, 1.3400, 1.3450, 1.3500.
Support levels: 1.3300, 1.3250, 1.3200, 1.3159.
The British pound is trading mixed against the US currency during the morning session, consolidating around 1.3320 amid most of the long profit taking.
The day before, the instrument showed steady growth and updated local highs from November 24, which was the market's reaction to a rather unexpected increase in rates by the Bank of England. Citing high inflation, which reached 5.1% in November on an annualized basis (after rising 4.2% in October), the regulator announced an increase in the key interest rate to 0.25%, and the decision was made almost unanimously (8 votes against 1).
Thus, the Bank of England became one of the first major central banks in the world to take this step. In addition, the British regulator decided to maintain the volume of UK government bond purchases at 875B pounds. In turn, the US Federal Reserve, which held a meeting the day before, only announced acceleration in the pace of curtailing the quantitative easing (QE) program.
Support and resistance
In the D1 chart, Bollinger Bands are reversing horizontally. The price range is expanding but it fails to conform to the surge of "bullish" sentiments at the moment. MACD grows, preserving a stable buy signal (located above the signal line). Stochastic keeps its upward direction but is rapidly approaching its highs, which reflects the risks of overbought GBP in the ultra-short term.
Resistance levels: 1.3350, 1.3400, 1.3450, 1.3500.
Support levels: 1.3300, 1.3250, 1.3200, 1.3159.