- The GBP/USD pair remain mostly unchanged near 1.2930 on Thursday.
- BoE’s monetary policy meeting results and QIR will be in focus.
- The 1.2900-1.2980 range can limit the pair’s immediate move.
The British Pound trades little changed around 1.2930 against the USD heading towards the London open. Global investors await the Bank of England (BoE) monetary policy meeting scheduled at 12:00 GMT in order to determine near-term market bias. In addition to the monthly official bank rate announcement and monetary policy summary, the quarterly inflation report (QIR) and the Governor Carney’s speech also contributes towards making the day as a “Super Thursday”.
In light of challenges at home and abroad, the UK central bank is expected to hold present monetary policy unchanged with official bank rate being at 0.75%. Though, a downward revision to the near-term growth and inflation forecasts can’t be denied.
The BoE left its fourth quarter 2018 growth domestic product (GDP) and unemployment rate forecasts unchanged around 1.5% and 3.9% while revising up the inflation prediction to 2.5% from 2.3% during November release. At the same time, the bank did cut its inflation and GDP expectations for the final quarter of the current year to 1.7% and 2.1% respectively against 1.8% and 2.2% earlier forecasts. It should be noted that the BoE kept favoring 3.9% unemployment for the longer-term as well.
BoE Governor Mark Carney may prefer waiting for the clear signs on Brexit prior to announcing any possible rate moves but might not refrain from indicating a rate lift if the situation demands.
“We see the MPC as having a hawkish bias, given a positive output gap and rising cost pressures. But it is waiting for Brexit, where we now expect delay, pushing the next hike out,” says Morgan Stanley analysts.
BNP Paribas expects deterioration in inflation and growth forecasts as it reported “A weaker global backdrop and prolonged Brexit uncertainty is likely to see the MPC revise down its forecasts for growth and inflation.”
With the latest noise surrounding Brexit and downbeat data-points, the BoE’s dovish can add weakness to the GBP.
GBP/USD Technical Analysis
The 100-day simple moving average (SMA) level of 1.2900 becomes an immediate support for the GBP/USD pair during its further declines whereas 1.2830 and the 1.2805, including 50-day SMA, may opt for appearance past-1.2900.
On the upside, an immediate descending trend-line, at 1.2980, can act as nearby resistance ahead of escalating the recovery to 1.3050 and 1.3135 numbers to north.