- The BoE emphasized its commitment to keeping rates stable for the foreseeable future.
- Data revealed a more significant than expected slowdown in US job growth in October.
- British services businesses experienced a third consecutive month of reduced momentum in October.
The GBP/USD forecast remains strongly bullish as it had the best weekly performance in four months, thanks to a combination of factors that boosted sterling’s appeal. This surge followed the Bank of England’s (BoE) decision to maintain interest rates at a 15-year high. Additionally, it emphasized its commitment to keeping rates stable for the foreseeable future.
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Moreover, the pound rose against the dollar because data revealed a more significant than expected slowdown in US job growth in October. Strikes by the United Auto Workers (UAW) union against Detroit’s “Big Three” car manufacturers suppressed manufacturing payrolls. Additionally, wage inflation cooled, indicating a relaxation in labor market conditions.
Notably, the BoE opted to keep borrowing costs unchanged at 5.25%. Furthermore, the central bank released forecasts indicating that the British economy was likely to teeter on the edge of recession and experience flat growth in the upcoming years.
Meanwhile, the Monetary Policy Committee (MPC) released the latest projections and clarified that monetary policy would remain restrictive for an extended period.
Moreover, a survey conducted on Friday indicated that British services businesses had experienced a third consecutive month of reduced momentum in October. It added to evidence that the economy was concluding 2023 with weak performance. High interest rates and living costs continued to weigh on demand.
GBP/USD key events today
The pair might consolidate as no key economic reports will come from the US or the UK today.
GBP/USD technical forecast: Bulls aiming for 1.2400
The pound has experienced a strong surge from the 1.2200 key level. Buyers made a strong move that saw the price break above the 1.2303 resistance level. Moreover, the price swung well above the 30-SMA, and the RSI got overbought. It indicates a strong bullish bias.
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Currently, the price is heading for the next key level at 1.2401. After such a strong move, the price might pause at 1.2401 for a retracement and to allow the SMA to catch up. Moreover, this pause might lead to a retest of the 1.2303. Still, the bullish bias is strong, and if the price stays above 30-SMA, it will soon break above 1.2401.
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