After the FOMC meeting, the focus shifted to the results of the monetary policy meeting of the central bank of England at the beginning of the New York session yesterday.
The Bank of England (BOE) is following in the footsteps of the Federal Reserve (Fed) to raise interest rates by 25 basis points.
The interest rate increase from 0.50% to 0.75% is the BOE’s second increase this year.
Still, it came as a bit of a surprise to investors when the Pound’s reaction weakened following the decision of the rate hike by the BOE which was supposed to drive up the value of the currency.
Compared to the expectation of a unanimous vote for a rate hike, while 8 others voted for a rate hike, there was one meeting member who voted for the rate to be maintained.
Slightly dovish, Pound gave a rather shocking reaction with a sharp decline before rebounding afterwards.
On the price chart of the GBP/USD pair, the price that had made a rise to the resistance level of 1.32000 then plunged 100 pips to the level of 1.31000.
Supported by the Moving Average 50 (MA50) support level on the 1 -hour time frame, the price rebounded but was blocked around the 1.31700 level and the horizontal price movement around it continued until the Asian session this morning.
If the rise is successfully resumed, passing the resistance zone 1.3200-1.31700 will push a more positive expectation for a bullish trend for the price to move to the SBR zone (support become resistance) at 1.33000.
A further higher rise is expected to reach the high of 1.34000 and test the resistance zone.
Meanwhile, for bearish expectations, a decline below the 1.31000 level and the MA50 support level will signal a change in the bearish trend.
A further decline in the price will head back to the support level of 1.30000 after the price started rising at the beginning of the opening earlier this week in the zone.
