The Bank of England (BoE) voted to keep interest rates in the UK unchanged at 0.1%, and also left the Asset Purchasing Program intact at 875 billion pounds. This met the forecasts of analysts polled before the news release.
However, the BoE statement, while downplaying the use of negative rates at this time, effectively left the door open for future consideration as it noted that the emergence of COVID-19 vaccine resistance could slow down recovery and unwind any gains made. As such, market projections for a possible negative interest rate implementation have now shifted from August 2021 to February 2022 following today’s BoE decision and statement.
Technical Levels to Watch
The BoE’s decision has allowed the pair to push up from intraday lows at 1.35661. This move ends the pair back above the 1.36117. This has turned the candle into a pinbar with bullish ramifications.
A bounce from this support allows the GBP/USD to target the 1.37025 resistance. Above this level, 1.37916 remains an elusive upside target.
On the flip side, the pair needs to see a breakdown of 1.36117 for the bearish stride from the rising wedge to continue. This measured move’s projection could see it attain 1.32663. However, support barriers at 1.35134, 1.34765, 1.33951, and 1.33193 need to give way for this move to come to fruition.
GBP/USD Daily Chart