GBPUSD Falls as BoE Cuts 25bps
Bank of England Reduces Bank Rate to 4.5%
In a move to support the UK economy, the Bank of England's Monetary Policy Committee (MPC) voted today to reduce the Bank Rate by 0.25 percentage points, bringing it down to 4.5%. This decision comes in response to a weakening inflation outlook, with projections suggesting a further dip below the 2% target in the coming months before gradually returning to the target in the medium term.
The MPC also opted to maintain the existing stock of government bonds acquired through its quantitative easing program at £1 trillion. This decision reflects concerns about subdued economic growth in the near future, with expectations of a gradual recovery in the medium term.
Key takeaways from the policy statement:
● Bank Rate reduction: Aimed at stimulating economic activity by making borrowing more affordable.
● Quantitative easing maintained: Continued support for the economy through the existing bond-buying program.
● Inflation outlook: Anticipating a temporary fall below the 2% target before returning to the desired level.
● Growth outlook: Expecting a period of subdued growth followed by a gradual recovery.
This policy adjustment signals the Bank of England's commitment to navigating the current economic challenges and fostering sustainable growth while keeping inflation in check.
The British Pound is getting hammered! This 4-hour chart of the Currency Index paints a grim picture, and I anticipate the pain will continue for Sterling.
GBPUSD Technical Breakdown
As I mentioned in the video, I've been holding a short position on GBPUSD since yesterday, and I believe there's potential for further downside. The dollar is showing strong underlying value from a mid-to-long-term perspective, which makes me want to sell GBPUSD again. I'm eyeing the 1.245 - 1.247 zone as an ideal entry point for another short position. To manage risk, I'll place a stop-loss order above the 1.2500 resistance, which also coincides with the 61.8% Fibonacci retracement level. My short-term target is 1.2300, especially if the dollar continues its bullish momentum next week.
However, it's important to be cautious and watch for key economic data releases next week. On Wednesday, we have the US inflation figures, and if they come in hot or exceed market expectations, it could further strengthen the dollar. Then on Thursday, we have UK GDP data, which is crucial given the current concerns about economic activity in the country.
I'll be sharing more insights on GBPUSD in my weekly market overview this coming Monday, which I'll be posting on TradingView. Stay tuned for that! Happy trading everyone!
In a move to support the UK economy, the Bank of England's Monetary Policy Committee (MPC) voted today to reduce the Bank Rate by 0.25 percentage points, bringing it down to 4.5%. This decision comes in response to a weakening inflation outlook, with projections suggesting a further dip below the 2% target in the coming months before gradually returning to the target in the medium term.
The MPC also opted to maintain the existing stock of government bonds acquired through its quantitative easing program at £1 trillion. This decision reflects concerns about subdued economic growth in the near future, with expectations of a gradual recovery in the medium term.
Key takeaways from the policy statement:
● Bank Rate reduction: Aimed at stimulating economic activity by making borrowing more affordable.
● Quantitative easing maintained: Continued support for the economy through the existing bond-buying program.
● Inflation outlook: Anticipating a temporary fall below the 2% target before returning to the desired level.
● Growth outlook: Expecting a period of subdued growth followed by a gradual recovery.
This policy adjustment signals the Bank of England's commitment to navigating the current economic challenges and fostering sustainable growth while keeping inflation in check.
The British Pound is getting hammered! This 4-hour chart of the Currency Index paints a grim picture, and I anticipate the pain will continue for Sterling.
GBPUSD Technical Breakdown
As I mentioned in the video, I've been holding a short position on GBPUSD since yesterday, and I believe there's potential for further downside. The dollar is showing strong underlying value from a mid-to-long-term perspective, which makes me want to sell GBPUSD again. I'm eyeing the 1.245 - 1.247 zone as an ideal entry point for another short position. To manage risk, I'll place a stop-loss order above the 1.2500 resistance, which also coincides with the 61.8% Fibonacci retracement level. My short-term target is 1.2300, especially if the dollar continues its bullish momentum next week.
However, it's important to be cautious and watch for key economic data releases next week. On Wednesday, we have the US inflation figures, and if they come in hot or exceed market expectations, it could further strengthen the dollar. Then on Thursday, we have UK GDP data, which is crucial given the current concerns about economic activity in the country.
I'll be sharing more insights on GBPUSD in my weekly market overview this coming Monday, which I'll be posting on TradingView. Stay tuned for that! Happy trading everyone!
Trade active
We've reached our first take-profit zone at 1.2370, securing 80 pips. I recommend taking partial profits here. For the remaining position, move your stop-loss to break even. A further drop in GBP/USD is likely, so this will protect your gains while still allowing you to benefit from potential further downside.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.