The results of the meeting of the central bank of England last night met the expectations, but the Pound gave an unexpected surprise to investors.
The Bank of England (BOE) as expected by the market raised interest rates by 75 basis points at the latest monetary policy meeting, but the Pound moved sideways after experiencing a significant depreciation in the New York session.
This is due to a follow-up statement by the central bank that gave a gloomy signal for economic growth in the UK. Economic growth is projected to be slower with contraction in 2024 projected to 1% compared to 0.25% at the previous meeting.
On the price chart of the GBP/USD currency pair which was the focus of investors yesterday, the price was seen to have plunged up to 250 pips following the reaction of the meeting with the strengthening of the US dollar still managed to be maintained.
The price has made a decline from the high level of 1.14200 until reaching the level around 1.11600, with the rate of decline being twice as large as during the FOMC meeting.
The bearish trend movement signal is more clearly displayed with the price remaining below the Moving Average 50 (MA50) obstacle level on the 1-hour time frame and the price has dropped to a 2-week low.
The continued price movement in the Asian session this Friday morning is slowly hovering around 1.12000 with the expectation that the downward trend will continue.
A further drop in price is seen to lead to the next concentration level at 1.11000 which had previously been a support level for the price in trading on October 21.
If the price breaks through that level, it is expected that the price can reach back to the 1.09000 zone for a record 3-week price low.
However, analysts have not ruled out any surprises at the end of the week as investors await the release of the US NFP jobs data report shortly.
The price is likely to bounce back with the initial resistance that will be the focus seen at 1.13000.
If it crosses the MA50 barrier, investors will be alert for a bullish trend change again with a price target to return to the 1.14500-1.15000 zone.
