- The pound demonstrated resilience following the Bank of England’s decision to maintain interest rates at a 15-year peak.
- The Bank of England indicated that there are no immediate plans to decrease rates.
- There are concerns about an upcoming economic recession in the UK.
On Friday, there was a bullish sentiment in the GBP/USD price analysis as the British pound remained strong against the US dollar. It showed resilience after the Bank of England decided to keep interest rates unchanged at a 15-year high. However, the central bank signaled that there are no immediate plans to decrease rates.
-If you are interested in automated forex trading, check our detailed guide-
Furthermore, Governor Andrew Bailey warned against complacency and emphasized that inflation still remains too high. Bailey stated, “We will closely monitor the need for further interest rate increases. However, it is too early to consider rate reductions.”
Nevertheless, investors concluded that the Bank of England is more likely to decrease rates in the future.
There are concerns about an upcoming economic recession in the UK and limited growth in the near future. However, the Bank of England reiterated its commitment to keeping borrowing costs high. Additionally, the UK economy is already dealing with the impact of interest rate increases from December 2021 to August of this year.
Meanwhile, British government bond yields significantly declined as the Bank of England painted a bleak economic outlook. In recent days, both the European Central Bank and the US Federal Reserve chose to maintain their current interest rates.
Governor Bailey acknowledged the potential inflation risk caused by elevated energy prices due to the conflict in the Middle East. However, he noted that such an impact has not yet materialized.
GBP/USD key events today
It will be a busy day for GBP/USD traders as they will receive several significant economic reports from the US, including:
- The US monthly nonfarm payrolls report.
- ISM non-manufacturing PMI.
- S&P Global Services PMI.
GBP/USD technical price analysis: Bulls meet strong resistance at 1.2200.
The GBP/USD price has reached a halt at the resistance level of 1.2200 after a strong increase from the support level of 1.2100. Notably, the pound has been trading within a range between the support level of 1.2100 and the resistance level of 1.2200. It attempted to break out of this range but faced a strong rejection and returned to consolidation.
If you are interested in guaranteed stop-loss forex brokers, check our detailed guide-
Therefore, although the price is currently above the 30-SMA, supporting the bulls, this could change soon. If the resistance at 1.2200 holds strong, the price is likely to fall below the 30-SMA and retest the support range of 1.2100. However, if the bulls are stronger, the price will rise towards the resistance at 1.2275.
Looking to trade forex now? Invest at eToro!
67% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.
