The Bank of England presented forward guidance and knocked out the pound which was already weakening.
However, as Mark Carney presented the “knockouts†from this forward guidance, GBP/USD made a huge u-turn, bouncing from the lows of 1.5207 all the way to 1.5387 and the move isn’t over. Can the pair break above the critical 1.54 level?
It could be a case of “buy the rumor, sell the fact†or perhaps after we got some clarity on the BOE’s policy, the pound can now fully react to the excellent economic data coming out of the UK.
Update: 1.54 has been broke and the pair reached 1.5408, but the break is not confirmed yet.
Update 2: GBP/USD is moving up faster, rising to 1.5440 and the move above 1.54 now seems quite convincing. Next stop, 1.55?
The pound is also gaining against the euro, with EUR/GBP falling to 0.8632. It already jumped to 0.8730 on the initial reaction.
The pound got some indirect back wind from the old continent: German industrial production jumped by 2.4%, and this triggered buying of EUR/USD. Perhaps the sale of dollars also helped GBP/USD.
For more, see the GBPUSD forecast.
