GBP/USD shrugged off the impact of Bank of England Governor Andrew Bailey’s speech at the ECB forum in Sintra and rose to 1.3287 on Thursday.
Earlier, Bailey confirmed that he had opposed the interest rate increase at the last meeting, citing signs of a slowdown in the British economy.
He also noted that the regulator should exercise greater caution in projecting the future rate path, as overly rigid guidance could limit the flexibility of monetary policy.
Bailey’s comments reinforced expectations of a more cautious approach to future rate decisions, which briefly weighed on the pound. However, the market absorbed the impact quickly.
Technical Analysis
On the H4 GBP/USD chart, the pair is moving towards 1.3300 (a test from below). A broad consolidation range is forming around this level. An upside breakout from the range would open the way for a move towards 1.3350. A downside breakout would suggest a move towards 1.3200, with scope for the trend to extend to 1.2980. The MACD indicator supports this scenario, with its signal line above zero and pointing firmly upwards.
On the H1 chart, GBP/USD is trading within a compact consolidation range around 1.3255, currently extending down to 1.3220. A move higher towards 1.3300 is expected, followed by a decline towards 1.3200. The Stochastic oscillator confirms this scenario, with its signal line above 50 and pointing upwards towards 80.
Conclusion
Sterling has shown resilience, pushing higher despite Bank of England Governor Bailey’s dovish remarks at the ECB forum. His confirmation that he opposed the last rate hike and his call for more cautious forward guidance initially weighed on the pound. However, the market quickly absorbed these comments, with GBP/USD recovering to trade around 1.3287. The central bank’s cautious tone may limit the pound’s longer-term upside potential, but for now, technical indicators point to further gains towards 1.3300 and potentially 1.3350. The broader direction will depend on upcoming UK economic data and any shifts in Bank of England policy.
Source: Original Article
