- Summary:
- The GBPUSD pair rose slightly while the EURGBP pair fell after the BOE delivered a neutral interest rate decision leaving rates unchanged and adding QE
The GBPUSD pair is little changed today even after the Bank of England (BOE) delivered its interest rate decision. The pair is trading at 1.2535, which is 0.25% lower than the day’s open. The EURGBP pair, on the other hand, is slightly higher and is trading at 0.8942.
Bank of England leaves rates unchanged
In its interest rate decision today, the Bank of England (BOE) decided to leave interest rates unchanged at 0.10%. This was in line with what analysts were expecting. The bank also moved further by announcing an additional £100 billion to its Quantitative Easing (QE) program. This brings the total amount of QE announced this year to $300 billion. By adding £100 billion, the bank increased the ceiling of the purchases to £745 billion. These purchases will end by the end of the year.
In the statement, the BOE said that the economy contracted by 20% in April after falling by 6% in March. It still expects that the economy will make a modest recovery barring another wave of coronavirus. The bank said:
“The MPC will continue to monitor the situation closely and, consistent with its remit, stands ready to take further action as necessary to support the economy and ensure a sustained return of inflation to the 2% target.”
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GBPUSD technical analysis
On the daily chart, the GBPUSD pair touched the important support level of 1.2468 that we had talked about early today. It then pared some of those losses and is trading at 1.2535 ahead of a press conference by Andrew Bailey. The price is now along the 100-day exponential moving averages and slightly above the 50% retracement level. As I mentioned today, a move below the support of 1.2468 will see the pair continuing moving lower, potentially below 1.2400.
On the other hand, a move above the important resistance of 1.2600 will see the pair continue moving upwards as bulls attempt to test the previous high at 1.2812.
EURGBP technical outlook
The EURGBP pair rose slightly after the BOE interest rate decision. It is now trading at 0.8986, which is slightly higher than the day’s low of 0.8946. On the daily chart, the price is above the 50-day and 100-day exponential moving averages. It is also inches below the 50-day EMA. The price also appears to be forming an ascending triangle pattern. This means that the EURGBP pair could breakout higher as bulls attempt to move above 0.9000.