GBPUSD trades lower for the third day in a row as the pair corrects from recent highs amid the expectations and the decision for an interest rate cut by the BOE. The Bank of England yesterday cut the interest rates by 50 basis points to 0.25% in an emergency move. The MPC also decided to introduce a new Term Funding scheme adding extra stimulus for Small and Medium-sized corporations, financed by the issuance of the BOE reserves.
Now traders will shift their attention to what will be the next move by Fed as many believe that the central bank might proceed with one more emergency cut in an attempt to combat the coronavirus outbreak impact in the U.S. economy.
According to our forex calendar, later today we await the Producer Price Index and the Initial Jobless Claims from the USA due at 12:30GMT.
GBPUSD is 0.65% lower at 1.2735 as the pair approaches two-week lows. The technical outlook is bearish now as the index breached below the 100-day moving average two days ago and selling pressure might accelerate today in an attempt to test the 200-day moving average.
On the downside, immediate support for the GBPUSD stands at 1.2720 the daily low. The next critical support area would be met at 1.2706 the 200-day moving average. A break below might attract more bears to join the action for a move down to 1.2655 the low from October 16th, 2019.
On the other hand, resistance stands at 1.2849 the daily top. If GBPUSD breaks higher, the next resistance level would be met at 1.2986 the 100-day moving average. More offers would be met at 1.3125 the high from March 10th.