BoE delivers the rate hike, but Brexit sends the GBP/USD down
InvestingOnline.com
2/08/2018, 20:28Mark Carney delivered on Thursday, and the Bank of England rose its interest rate by 25 basis points from 0.50% to 0.75%. The decision was taken unanimously and in line with market expectations.
The BoE kept unchanged its asset purchase facility at £435B. “The Committee also voted unanimously to maintain the stock of UK government bond purchases, financed by the issuance of central bank reserves, at £435 billion,” the press release said.
According to the BoE, “the projected pace of GDP growth over the forecast is slightly faster than the diminished rate of supply growth, which averages around 1½% per year.” Unemployment is low and projected to fall a little further.
GBP/USD down to 1.3000 as BoE is concern about Brexit and aftermath
GBPUSD daily chart Aug 2
The Sterling traded down following the BoE decision to hike interest rate to 0.75%. GBP/USD fell over 100 pips from 1.3130 to 1.3015 as the BOE rose rates, but anticipated quite a slow path for the upcoming years as Brexit aftermath.
GBP/USD is trading 0.83% negative on the day at 1.3017. Technical conditions are bearish for the Cable. A violation of the 1.3000 area would trigger stop losses that would launch the pair more in-depth into the 1.2700 space.
If the pair breaks below the 1.3000, next supports would be found at 1.2960, 1.28560 and 1.2790. To the upside, GBP/USD needs a close above the 20-day moving average at 1.3150. Resistances are at the 50-day moving average at 1.3230 and July 9 high at 1.3360.
