The GBP / USD reacts positively after yesterday’s decision by the Bank of England. At its January meeting, the bank decided to leave the interest rate unchanged at 5.25 percent, citing the need for more evidence of continued inflation.The pair is currently trading around 1.27533 and is up 0.44% on the day.The BoE kept interest rates at 5.25% on Thursday, but a slowdown in inflation could mean a cut in borrowing costs in the third quarter of 2024. Bank of England Governor Andrew Bailey said the BoE had seen good news on inflation in recent months and they need more evidence that inflation must fall to the 2% target before they can cut interest rates.Moreover, the dollar index weakens nearly half percent yesterday, amid bet that the Federal Reserve is closer to cutting interest rates, even after Chairman Jerome Powell said that a move in March was unlikely. Powell said on Wednesday that rates had peaked and would move lower in coming months, with inflation continuing to fall and an expectation of sustained job and economic growth.In addition, US labor market data for January will be released later today, including non-farm payrolls, the unemployment rate and average hourly wages. The US economy is expected to add 180,000 jobs in December, down from a gain of 216,000 in January. All numbers strongly influence the couple.
Data on Thursday showed that U.S. fourth quarter worker productivity grew faster than expected, while initial claims for state unemployment benefits increased in the latest week. U.S. manufacturing also stabilized in January amid a rebound in new orders
In addition, US labor market data for January will be released later today, including non-farm payrolls, the unemployment rate and average hourly wages. The US economy is expected to add 180,000 jobs in December, down from a gain of 216,000 in January. All numbers strongly influence the couple.
Technical Outlook
The GBPUSD pair gains above 1.2740 mark yesterday, pair gained over 0.40%. Recovered from the day’s lows 1.2651.00.
On the above chart, pair is trading on a verge of symmetrical triangle resistance. A break above 1.27750 mark is appears to set more than 2%-3% gain in days to come. Adding to this, pair is trading above its 20 DMA which also indicating for a upside momentum.
Hence, trend expect to remain bullish in the GBPUSD pair and the first upside target could expect 1.28850, and second target 1.2925.
On the downside, 1.26560 mark will act as a crucial support below it pair could retreat towards 1.2590-1.2540.00.
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