Gbp Gains On Boe Rate Cut

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Gbp Gains On Boe Rate Cut

Pound Sterling (Gbp) Gains On Boe Rate Cut

Pound Sterling (GBP) appears to be gaining ground against its peers on Thursday. This comes after the Bank of England (BoE) decision to cut the rates by 25 bps.

After the rate cut, the policy rate in the UK is now 4.75%. The decision was made with 8/9 votes in favor of the rate cut, while one member voted for keeping the rates unchanged.

25 Bps Rate Cut By Boe

Overall, that's the 2nd rate cut from the Bank of England in 2024, with the first one in August. If we look back, August also led to a 25 bps rate cut, and then we decided to keep rates steady in September.

BoE Governor also provided guidance on the interest rate policy and clarified that rates will continue to decline. However, it will depend on whether the economy shows positive signs.

The Governor also made it clear that the inflation pressure must dissipate for the monetary policy to change in the long term. The central bank has also issued its GDP forecast for 2024 to be around 1%.

Meanwhile, the Pound Sterling (GBP) has rebounded after touching 11-week lows around 1.2830. Now, the GBP/USD is in the recovery phase and has found some buyers near 200 EMA.

However, despite the recovery, the short-term trend is still bearish, with the 20 and 50 EMA present at 1.2990 and around 1.3030.

look at the D1 chart of GBP/USD shows that prices have closed below the lower trendline of the rising channel. That's also a sign that GBP/USD is under the grasp of sellers.

The RSI shows a reading of 40.00, which means any more downside will invite more bearish momentum in the GBP/USD pair.

On the way down, the first support is around 1.2800, which could provide some cushion for the GBP. On the way up, the first resistance is around 1.3000.

The bottom line is that GBP/USD is in recovery phase but the trend remains tilted in favor of the bears.

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