Yesterday, a regular meeting of the Bank of England was held, at which the English regulator did not make any changes to its monetary policy. Such a decision was assumed and coincided with the expectations of market participants. Thus, it did not cause any resonant effect. The base interest rate remained at the historical minimum of 0.1%, and there were no changes in the volume of the bond purchase program. It remained at the level of 875 billion pounds. Seven votes were given for this decision by the representatives of the MPC of the British Central Bank. Purchases of corporate bonds remained at the level of 20 billion pounds. According to the forecasts of the Bank of England experts, GDP will grow by 5% in the second quarter of this year, and GDP growth is expected to grow by 3% in the third quarter. The management of the British Central Bank and their colleagues from the Fed considers the global increase in inflation to be a temporary factor. In the near future, it will decrease to the target level set by the bank at 2%.
With the normal functioning of global trading platforms, the Bank of England is ready to reduce the number of acquired assets. However, this will also happen when the main interest rate rises to 0.5%. At the same time, the comments of the British monetary officials almost bypassed the still relevant and topical topic of COVID-19. However, everything that could be said about this phenomenon has already been said repeatedly. COVID-19 and its new strains continue to pose significant risks to the recovery of the global economy, including the British one. Perhaps these are all the main points of yesterday's meeting of the British Central Bank. And now let's see how the British pound reacted to yesterday's events or the main currency pair GBP/USD.
Daily
According to the results of yesterday's trading, the pair showed quite good growth, which can be linked with the announcement of the Bank of England about its readiness to start reducing the volume of purchased assets. There is no doubt that this statement can be attributed to the "hawkish," and the level of the main interest rate of 0.5% was not mentioned by chance. At yesterday's trading, the pair rose to 1.3947 but then rolled back a little and ended Thursday's session at 1.3925. Nevertheless, a strong and important level was confidently passed up. However, this is not enough for strong bullish sentiment on the instrument and the continuation of a clear and directed upward movement.
Moreover, the pair is located under the resistance line (blue) 1.4247-1.3980. The last meeting with the Ichimoku indicator cloud will be the nearest and next test for the pound bulls. Well, then, in the case of a successful overcoming of 1.3980, the pair expects a strong and key resistance of sellers in the area of 1.4000-1.4015. The black 89 exponential moving average and the red Tenkan line, which runs slightly lower at 1.3871, are strong support at the bottom.
Taking into account yesterday's minimum values shown at this mark, it will become the immediate goal and task of the bears, who will need to push through the Tenkan and the level of 1.3871 at all costs. Well, let's take the results and try to determine the positioning options for GBP/USD. I think few people have any doubts that the quote is bullish and is moving up. It is another matter of whether the bulls will be able to pass all the obstacles indicated above by the pound. Once again, I will express my opinion that I consider the ascending scenario the most relevant for the pound/dollar pair. However, this will be confirmed by the confident consolidation of the price above 1.4015.
Regarding trading recommendations, purchases from the technical depth look very good after the pair's decline to the support area of 1.3871. To be more precise, we will define the price zone for purchases as 1.3880-1.3870. I recommend trying sales after the appearance of the corresponding bearish candlestick analysis models in the price area of 1.3980-1.4015. Perhaps that's all.