GBP/USD: Pound Holds onto Gains Following BoE Decision

Explore GBP/USD trends after the BoE decision. Get insights on key levels & market analysis for strategic trading decisions.

The British pound retained its gains following the Bank of England’s decision to maintain interest rates at their current levels. BoE Governor Andrew Bailey emphasized the necessity of sustaining these rates to curb inflation and stabilize the UK job market, considering the lingering effects of previous rate hikes. Despite market expectations indicating a possibility of additional rate cuts in December 2024, Governor Bailey’s stance contradicts this outlook, emphasizing the need for more data to assess the BoE’s trajectory accurately.

Pound Holds onto Gains Following BoE Decision

In the upcoming sessions, US-specific data, particularly the Non-Farm Payroll (NFP) report, will be pivotal in shaping market dynamics. The UK services PMI, though expected to remain below the 50 mark, may have limited influence on the GBP/USD pair due to its recent contractionary trend. Meanwhile, the US ISM services PMI, a vital indicator for the primarily services-driven US economy, remains in the expansionary zone, offering a contrasting perspective to the UK scenario. Additionally, insights from various Fed speakers post-FOMC will add to the market sentiment.

Technically, the GBP/USD pair is currently trading within a symmetrical triangle pattern, following a downtrend. However, a breakout above triangle resistance could alter this trajectory, with short-term market direction likely hinging on the upcoming US data releases. The Relative Strength Index (RSI) at the neutral 50 level indicates market hesitancy, favoring neither bullish nor bearish momentum.

Key Resistance Levels:

• 200-day MA
• 1.2308/50-day MA
• Triangle resistance

Key Support Levels:

• 1.2200
• 1.2100/Triangle support
• Trendline support
• 1.2000
• 1.1804

Retail traders currently exhibit a bullish sentiment on GBP/USD, with 67% holding long positions, as per IG Client Sentiment Data (IGCS). Stay tuned for further updates as market developments unfold.

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