GBP/USD Slumps After BoE Decision; Selling favored at 1.2530, with buying at 1.2610. Sterling hits lows, affected by dovish BoE and Fed meetings. Eyes on US data, technicals suggest continued drop. Bearish view
Bullish view
The GBP/USD exchange rate jumped after the Federal Reserve decision and then quickly erased those gains after the relatively dovish Bank of England (BoE) meeting. The pair tumbled to a low of 1.2575, its lowest point since February 16th. BoE and Fed decisionsThe GBP/USD pair crashed hard as the Federal Reserve and the BoE made their second monetary policy meetings of the year.In its meeting on Wednesday, the Fed decided to leave interest rates unchanged at their 23-year high of 5.25% and 5.50%. The Fed hinted that it will slash interest rates three times this year even as inflation remains at an elevated level.Still, some experts believe that the Fed should wait before starting to cut rates. The jobless rate remains at 3.9%, meaning that the economy is in full employment. Further, the economy is still growing while inflation remains above its 2% target.The GBP/USD pair continued tumbling after the BoE delivered its decision. The bank also decided to leave rates unchanged at 5.25%. In his statement, Andrew Bailey said that rate cuts were in play as inflation continued falling.Data released on Wednesday revealed that inflation tumbled to 3.4% in February, its lowest level in two years. Core inflation also continued falling even as services and housing costs remains above its 2% target.The GBP/USD pair retreated after the UK published the February retail sales numbers. Sales remained unchanged in February after growing by 3.6% in the previous month. The figure was better than the expected 0.3% drop.The GBP/USD pair will next react to the upcoming US consumer confidence, US GDP, and personal consumer expenditure (PCE) data. The only important data to come from the UK will be the upcoming GDP report. GBP/USD technical analysisThe GBP/USD pair continued falling after the latest Bank of England interest rate decision. It crashed below the second support of the Woodie pivot point. The pair also moved to the lower side of the Bollinger Bands. It has also plunged below the 50-period moving average.The Relative Strength Index (RSI), the Stochastic Oscillator, and other momentum oscillators have all pointed downwards. It has also formed a bearish pennant pattern.Therefore, the pair will likely continue dropping, with the next point to watch being at 1.2527, its third support of the Woodie pivot point. The alternative scenario is where the pair rebounds to the psychological point at 1.2650.More By This Author:BTC/USD Forex Signal: Bitcoin Is Ripe For A Bullish BreakoutBTC/USD Forex Signal: Volatility Continues But A Rebound Is PossibleEUR/USD Forex Signal: Stuck In A Tight Range Ahead Of FOMC Decision
