It shrugged off the impact of Bank of England Governor Andrew Bailey's speech at the ECB forum in Sintra and rose to 1.3287 on Thursday.
Earlier, Bailey confirmed that he had opposed raising interest rates at the last meeting, citing signs of a slowdown in the British economy.
He also noted that the regulator should exercise greater caution when projecting the future path of rates, as too rigid a guidance could limit the flexibility of monetary policy.
Bailey's comments reinforced expectations for a more cautious approach to future rate decisions, briefly weighing on the pound. However, the market absorbed the impact quickly.
Technical analysis
On the H4 GBP/USD chart, the pair is moving towards 1.3300 (a test from below). A wide consolidation range is forming around this level. An upside break of the range would open the way for a move towards 1.3350. A break lower would suggest a move towards 1.3200, with room for the trend to extend to 1.2980. The MACD indicator supports this scenario, with its signal line above zero and pointing firmly upwards.
On the H1 chart, GBP/USD is trading within a compact consolidation range around 1.3255, which currently extends to 1.3220. A bullish move towards 1.3300 is expected, followed by a fall towards 1.3200. The stochastic oscillator confirms this scenario, with its signal line above 50 and pointing towards 80.
Conclusion
Sterling has shown resilience, rising despite Bank of England Governor Bailey's dovish comments at the ECB forum. His confirmation that he opposed the latest rate hike and his call for a more cautious forward guidance initially weighed on the pound.
However, the market quickly absorbed these comments and GBP/USD recovered to trade around 1.3287. The central bank's cautious tone may limit the pound's long-term upside potential, but for now, technical indicators point to further gains towards 1.3300 and potentially 1.3350. The broader direction will depend on upcoming UK economic data and any changes to Bank of England policy.
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.
