- The Bank of England dovish outlook is sending Sterling to a 4-month low.
- The US dollar remains the king currency as investors shrug-off softer US core inflation reading in April.
The GBP/USD is trading at about 1.3470 down 0.56% on Thursday after the Bank of England kept the Bank rate unchanged in line with expectations, but sounded too dovish on the outlook for both inflation and the policy rate.
The Bank of England failed to impress GBP bulls and the GBP/USD sold-off more than 120 pips from the 1.3600 handle on the back of dovish BoE’s comments. Later on, the US inflation came mixed and initially the Cable stabilized above the 1.3500 handle. However, the bounce was short-lived as the bears managed to break below the 1.3500 psychological level.
The status-quo remains unchanged after the BoE Super Thursday and the recent US softer inflation data. The GBP keeps its negative sentiment while the US dollar remains the king currency for the time being as the monetary policy divergence is taking its toll.
Meanwhile, US President Trump recently tweeted that he would meet Kim Jong Un, the North Korean leader on June 12, which is a positive for world peace and potentially for risk-on mood and the USD.
“The highly anticipated meeting between Kim Jong Un and myself will take place in Singapore on June 12th. We will both try to make it a very special moment for World Peace!” tweeted Trump.
GBP/USD 4-hour chart
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The main trend is bearish with the market trading below its 50, 100 and 200-period simple moving averages. Bears can expect support both at the 1.3400 and 1.3300 handle. To the upside, the bulls should meet immediate resistance at the 1.3500 handle and further up the 1.3600 psychological level which was the high of the day on Thursday.
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