GBPUSD bounced off its triangle support around the 1.3600 mark and might now be on track towards testing the resistance at the 1.3900 major psychological handle.

The 100 SMA is above the 200 SMA for now, so the path of least resistance is to the upside. This suggests that the bounce could keep gaining traction, although the moving averages might hold as dynamic resistance levels.

Stochastic is already indicating overbought conditions or exhaustion among buyers, but the oscillator has yet to turn lower to signal a pickup in selling pressure. RSI has more room to climb before reaching the overbought zone, so buyers could stay in control for a bit longer.

A bullish flag appears to be forming on the short-term charts, so a break past the current consolidation could set off a rally that’s the same height as the mast.

The BOE kept interest rates on hold as expected, but the number of hawks voting to decrease the total amount of asset purchases increased. Two members voted to lower stimulus from 875 billion GBP, signaling that it’s only a matter of time before the central bank starts tightening.

Policymakers pointed to skyrocketing inflation as a reason to reduce stimulus sooner rather than later. Prior to the central bank decision, the Markit PMI results revealed that businesses are struggling to keep up with higher price pressures, leading the manufacturing and services sectors to post slower growth in September.

Meanwhile, the dollar also drew some support from the FOMC decision, but the rally has fizzled since there were still some dovish remarks given. Although the Fed confirmed tapering for November and signaled scope to hike by mid-2022, the lack of changes in the unemployment rate forecasts suggests that the central bank is not counting on strong progress in hiring just yet.