- Summary:
- In this BOE interest rate preview, we look at the key GBP/USD levels to watch today even as the bank is expected to leave rates unchanged
The GBP/USD pair is rising today in reaction to overnight’s Fed interest rate decision. Traders are also focusing on the upcoming decision by the Bank of England (BOE). The GBPUSD is trading at 1.3542, which is the highest it has been in years.
What happened: Last night, the Fed delivered its rate decision. As most analysts were expecting, the bank decided to leave interest rates unchanged. It also committed to its asset purchases at a pace of $120 billion per month. But it did not give the end-period of the asset purchases.
What next: The GBP/USD will next react to the final BOE meeting of the year. Like the Fed, economists believe that the bank will leave interest rates unchanged at 0.10%. Also, it will continue with asset purchases since it already increased the size by £150 billion in the last meeting.
This rate decision comes at a time when there is uncertainty on all sides. While the UK is issuing Covid vaccinations, the number of new cases is rising and London is in the Tier-3 of lockdowns.
At the same time, there is a cloud surrounding Brexit, where the two sides are yet to reach an agreement.
GBP/USD technical outlook
What next for GBPUSD? On the hourly chart, we see that the GBP/USD price has been on an upward trend. It is trading at 1.3542, which is close to yesterday’s high. This price is also close to where it was in 2018. It is also being supported by the 25-day and 50-day exponential moving averages. Therefore, the pair will possibly continue to soar later today with the next target being at 1.3560.
GBPUSD technical chart
