• GBP/USD advanced towards 1.3100 level on Thursday after the BoE held borrowing costs steady..
• The Bank of England held interest rates steady on Thursday, but a close vote and indications that Governor Andrew Bailey may soon favor a cut leave the door open for easing after the government’s budget later this month.
•The MPC voted 5-4 to keep rates at 4%, with Breeden, Ramsden, Dhingra, and Taylor favoring a cut to 3.75%. Economists had expected a 6-3 split to hold the Bank Rate steady.
•Thursday’s decision marked the first pause in the BoE’s gradual rate-cut cycle, which has been occurring roughly every three months since August 2024.
• Bailey said he needs a sustained slowdown in inflation before considering rate cuts. UK inflation held at 3.8% in September, below the BoE’s 4% forecast, with market pricing reflecting his stance.
• UK inflation at 3.8% tops the G7, and the BoE’s rate is double the ECB’s, weighing on efforts to spur growth.
• Immediate resistance is located at 1.3155(38.2%fib), any close above will push the pair towards 1.3219 (50%fib)
• Strong support is seen at 1.3090(38.2%fib) and break below could take the pair towards 1.3000(Psychological level).
Recommendation: Good to sell around 1.3130 , with stop loss of 1.3200 and target price of 1.3050
