GBP/USD is under bearish pressure in the European morning on Thursday as the Bank of England (BoE) is anticipated to decrease the policy rate by 25 basis points. Interest rate swaps indicate a 40% chance of the BoE maintaining the bank rate.
Following a slight increase on Wednesday, GBP/USD dropped to its lowest level in three weeks below 1.2800 in the European session today.
Key Takeaways:
- US Dollar struggled on Wednesday, helping GBP/USD rise.
- Fed left policies unchanged, hinting at a possible rate cut in September.
- BoE expected to cut policy rate by 25 basis points.
BoE Governor Andrew Bailey will deliver the policy statement after the rate announcement at 11:30 GMT.
GBP/USD Technical Analysis
GBP/USD is currently below 1.2800 with the 200-period Simple Moving Average acting as resistance. Further losses towards 1.2710-1.2700 are possible. On the upside, resistance levels are at 1.2830, 1.2880, and 1.2900.
Pound Sterling FAQs
The Pound Sterling (GBP) is the oldest currency in the world and the official currency of the United Kingdom. It is influenced by BoE’s monetary policy decisions and economic indicators like GDP, manufacturing, and services PMIs.
Analysis:
The BoE’s interest rate decision and policy statement can have a significant impact on GBP/USD. If the BoE cuts rates as expected, GBP may weaken further. On the other hand, if rates remain unchanged, GBP could see a rebound. Traders should watch for key resistance and support levels for potential trading opportunities.