GBP/USD Remains Solid after BoE Monetary Policy

The Great Britain Pound (GBP) inched slightly lower against the US Dollar (USD) on Friday, decreasing the price of GBPUSD to less than 1.2275 following some key economic news. The technical bias has turned bullish after the emergence of bullish engulfing candle a couple of days ago.

Technical Analysis

As of this writing, the pair is being traded near 1.2257. A support can be noted around 1.2200 (a short term horizontal support area as well as psychological number) ahead of 1.2109 (low of the bullish engulfing candle emerged on Wednesday) and then 1.1986 (the low of 2017).

On the upside, a hurdle may be noted around 1.2437 (the trendline resistance area) ahead of 1.2700-1.2706 (the high of last major upside move & psychological number) and then 1.2774 (the high of December 6th, 2016) as demonstrated in the given above daily chart. The technical bias shall remain bullish as long as the 1.2109 support area is intact.

BoE Monetary Policy

A Bank of England policymaker surprised investors by breaking ranks and voting to raise interest rates and some others said it would not take much for them to follow suit, the BoE said on Thursday, signaling a potentially bigger split soon. Kristin Forbes, who is due to leave the BoE in June, cast the sole vote in favor of raising Bank Rate to 0.5 percent, the first Monetary Policy Committee split since last July. The other eight MPC members all opted to keep rates at 0.25 percent to help the economy as Britain prepares to leave the European Union.

Trade Idea

Considering the overall technical and fundamental outlook, buying the pair around current levels appears to be a good strategy in short to medium term.

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