GBP/USD: Bears Continue to Dominate Despite BoE Raising Interest Rates


In my last technical analysis outlook for GBP/USD, I said that the price is at risk of drifting lower ahead of the Bank of England’s rate meeting. I also mentioned that with the rate hike already priced in, it was unlikely that the British Pound will gain unless the Bank of England hinted about an additional rate hike in the months ahead.

Well, the BoE raised the interest rate by 25 bps causing the price to spike up to 1.3127, but the price retreated almost instantly and resumed its bearish momentum.

The price continued to decline through the end of Thursday’s trading session with a low of 1.3013 and started Friday with bearish price action. Overall, the bearish trend continues to dominate, and if the price revisits the 1.3108 to 1.3156 level, I suspect that traders might be willing to short GBP/USD, with targets set at the July 19 low of 1.2959, followed by the August 31 low of 1.2852.

I lowered the trend-defining level from the July 9 high of 1.3362 to the July 16 high of 1.3292, and a successful breach to this high might invalidate this bearish outlook.

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GBPUSD – Four-hour Chart

GBP/USD: Bears Continue to Dominate Despite BoE Raising Interest Rates

 



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