GBPUSD Movement
For the 24 hours to 23:00 GMT, the GBP rose 0.09% against the USD and closed at 1.3424, following better-than-expected retail sales data in the UK.
However, gains in the Pound were limited, after the Bank of England (BoE), at its latest monetary policy meeting, vowed that interest rates were likely to rise only gradually.
The BoE unanimously voted to keep its benchmark interest rate steady at 0.50% and its asset purchase facility at £435.0 billion, as widely expected. In the minutes accompanying the decision, policymakers stated that growth in the fourth quarter of this year “might be slightly softer” than in the previous quarter, while judging that inflation is likely to be close to its peak and will decline towards the 2.0% target in the medium term. The central bank also held the view that “further modest increases” in interest rates would be warranted over the next few years to help bring inflation to its target of 2.0%. On Brexit negotiations, the central bank stated that the latest developments reduce the chance of a disorderly exit from the EU.
On the macro front, Britain’s retail sales climbed more-than-expected by 1.1% on a monthly basis in November, allaying concerns of a slowdown in consumer spending. Retail sales had posted a revised gain of 0.5% in the prior month, while markets were expecting for an increase of 0.4%.
In the Asian session, at GMT0400, the pair is trading at 1.3433, with the GBP trading 0.07% higher against the USD from yesterday’s close.
The pair is expected to find support at 1.3395, and a fall through could take it to the next support level of 1.3358. The pair is expected to find its first resistance at 1.3468, and a rise through could take it to the next resistance level of 1.3504.
The currency pair is showing convergence with its 20 Hr moving average and trading above its 50 Hr moving average.
