GBP/USD reacts to Bank of England

Source: Dukascopy Bank SA


At 12:00 GMT on August 4, the Bank of England hiked its Official Bank rate by 0.50% from 1.25% up to 1.75%. In addition, the central bank has published its Monetary Policy Summary.

The Pound lost value due to the details of the monetary policy summary. Namely, one of the committee members did not vote for the 0.50% rate hike. Instead, the policymaker wanted only a 0.25% hike. It indicates that there has been discussion about easier monetary policy.

By 13:00 GMT, the currency pair had reached below the 1.2100 mark and remained highly volatile.

In the case of the pair extending its decline, the 1.2050 mark might act as support, prior to the rate reaching the weekly S1 simple pivot point at 1.2008 and the 1.2000 mark. On the other hand, a recovery of the Pound against the US Dollar is set to face the resistance of the weekly simple pivot point at 1.2127 and the 200-hour simple moving average near 1.2140.
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