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GBP / USD pair reacts positively to the results of the meeting of the Bank of England

In the Asian trading session, the GBP / USD pair slipped by almost 0.3% on the British media reports that the Bank of England may cut interest rates at the upcoming meeting. The Telegraph even wrote that the regulator could move the rate into the negative zone in order to strengthen support for the economy during this difficult period.

 

At the beginning of the European trading session, the pound was able to win back all the losses, as following the meeting the Bank of England left the key rate at 0.10%. The decision was taken unanimously. To increase stimulus measures, the regulator increased the volume of the asset repurchase program from 745 billion pounds to 895 billion pounds. This decision was also taken unanimously.

 

At the end of the 4th quarter, the regulator does not exclude a reduction in GDP against the backdrop of new quarantine measures.

 

Investors reacted positively to the decision of the Bank of England to leave the key rate at the same level. Later today, a press conference will be held by the head of the Bank of England Andrew Bailey, who can more clearly outline the plans of the regulator for the future. Most of all, investors are interested in the possible actions of the Bank of England in the event of a hard Brexit.

 

On the chart, buyers were able to defend support at 1.2940. The price climbed back above 1.3000. Today the quotes are growing to 1.3065, and in case of a breakdown of this mark, to 1.3150.

 

  • Resistance levels: 1.3065, 1.3150, 1.3255;

 

  • Support levels: 1.2940, 1.2845, 1.2800.

 

The main scenario - growth to 1.3065.

 

An alternative scenario - a breakdown of support at 1.2940 and a fall to 1.2845.

 

The current fundamental outlook is moderately positive. We consider longs near the level of 1.2940.

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