Turbulence in the movement of the Pound currency is being felt today (Thursday) following the palpitations awaiting the results of the central bank of England (BOE) meeting at 7pm later.
Yesterday Wednesday saw the release of UK inflation data in the European session with the annual consumer price index (CPI) reading unchanged at 8.7%, missing forecasts for a slight drop to 8.4%.
This will further strengthen expectations for the Bank of England (BOE) to continue tightening monetary policy, with an expected interest rate increase of 25 basis points to be implemented.
On the chart of the GBP/USD currency pair, the price was seen to bounce up slightly when the initial reaction to the CPI data was published in the European session yesterday.
However, after testing the barrier level of the Moving Average 50 (MA50) on the 1-hour time frame on the chart, the price began to reverse its direction, making a dive to 1.27000.
As expected, the RBS (resistance become support) zone of 1.27000 invited an attractive price reaction where there was a price rebound in the New York session in addition to being driven by the situation of the US dollar shrinking again.
After rising past the MA50 again, the price leveled off slowly at the beginning of the Asian session this morning at the 1.27700 level awaiting the results of the BOE meeting shortly.
If there is another surge, the price is seen to overcome the height reached last week around 1.24850 before heading towards the latest height target at 1.29000.
Touching that high would mark the price's latest record high since April 2022.
However, if the price plunges again, the RBS 1.27000 zone will once again be tested and the price reaction will be observed to assess the indication of further movement of the price.
If the price breaks down lower, the previous focus levels will return to become focus targets such as at 1.26000 and also 1.25000.
