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Takeaway from Bank of England’s Meeting

Takeaway from Bank of England’s Meeting

Updated

What happened?

The Bank of England has announced an important decision which sent GBP/USD up by over 1000 points. The central bank announced that it was concerned about the too-high inflation in the UK, which is likely to jump to “slightly above” 4% this year, double the BOE’s target level. Thus, the bank said that the case for higher interest rates "appeared to have strengthened".

What does it mean?

The UK central bank claimed that it would raise interest rates earlier than initially thought. It encouraged GBP’s bulls and sent the pound soaring. The next meeting on November 4 is going to be interesting for the markets! Before it comes, the expectation of the hike rate will support the pound.

Technical outlook

GBP/USD has bounced off the support line of 1.3600 and has jumped above the psychological mark of 1.3700. After a breakout, the pair pulled back to 1.3700. It should be just a natural sell-off before the further rally up. The jump above the late-August high of 1.3760 will open the doors to a mid-September high of 1.3850. Support levels are 1.3600 and 1.3700.

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