• GBP/USD strengthened on Thursday after the Bank of England kept rates on hold as widely expected and extended its bond reduction plan for another year.
• The Bank of England kept rates steady at 5%, as anticipated. The slight surprise was the vote split of 8-1, with Swati Dhingra being the only dove, contrasting with the expected 7-2 split.
• This has minimal impact on the bank’s rate outlook, as policymakers are maintaining a quarterly rate cut approach, with a November reduction being the most likely scenario.
• At GMT 16:02, the pair was trading up 0.49% at 1.3276, after hitting daily high 1.3312.
• Immediate resistance is located at 1.3289( 23.6%fib), any close above will push the pair towards 1.3312(Higher BB)
• Strong support is seen at 1.3164(38.2%fib) and break below could take the pair towards 1.3120(Sep 16th low).
Recommendation: Good to buy around 1.3270, with stop loss of 1.3180 and target price of 1.3360
