On Friday, the pair was around 1.2642, after a substantial drop. The Bank of England (BoE) has yet to find reasons to lower the interest rate, signaling intentions to maintain high rates for an extended period to support the level of inflation needed in the country. The Bank of England's monetary policy remains restrictive.
In its last meeting, the Bank of England kept the interest rate stable at 5.25% per year, unchanged from previous sessions.
The Bank of England's primary inflation target is 2%. Official forecasts suggest that the consumer price index in the UK will likely reach this target in the second quarter of 2024, with no immediate changes in monetary attitudes anticipated.
The market was “disappointed” that the Bank of England did not introduce any new policy, as major central banks around the world have begun (at least verbally) to move towards tightening monetary conditions. The Bank of England remains an outlier, sticking to a conservative “wait and see” approach.
The Bank of England is likely to continue with its current strategy. It will wait to see the results of interest rate hikes by the US Federal Reserve and the European Central Bank (ECB) and observe monetary reactions before considering any steps towards an adjustment based on inflation trends.
GBP/USD Technical Analysis
On the H4 chart of the GBP/USD pair, the fifth wave of decline is developing towards the level of 1.2594. After that, a possible correction to 1.2742 is considered, and a continued downtrend is expected. The MACD oscillator supports this scenario, with its signal line below zero and continuing downward towards new lows.
A descending wave structure is forming towards 1.2615 on the H1 chart. After reaching this level, there could be a possible rise to 1.2698, followed by a fall to 1.2594. The stochastic oscillator confirms this scenario, with its signal line below 20 and markedly directed downwards.
By RoboForex Analysis Department
Disclaimer
Any forecast contained herein is based on the author's personal opinion. This analysis cannot be considered trading advice. RoboForex assumes no responsibility for trading results based on the trading recommendations and reviews contained herein.
