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  • The GBP/USD rallied after the hawkish BoE.
  • The pair may come back to test and rest the broken levels before jumping higher in the short term.
  • A valid breakout through the warning line (wl1) may announce further growth.

The GBP/USD price bullish tone intensified after the BoE. Technically, the price was located in a support zone, so a rebound was somehow expected.

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Instead, it has registered a strong surge, more than 0.82%, from 1.3609 yesterday’s low to 1.3722 today’s high. As you can see for yourself, the GBP/USD is strongly bullish in the short term after ignoring the 1.3693 high.

The Pound has taken full control despite the fact that the UK Flash Manufacturing PMI was reported lower at 54.6 points versus 55.0 expected compared to 55.0 in the last reporting period. In addition, the Flash Manufacturing PMI dropped from 60.3 to 56.3, far below 59.0 estimates.

Fundamentally, the British Pound was boosted by the BoE, which left its monetary policy unchanged. The MPC members voted unanimously for keeping the Official Bank Rate at 0.10% as expected. But surprisingly, another member voted to end the QE. This was seen as a bullish sign for the GBP.

The US is to release its Flash Manufacturing PMI and the Flash Services PMI later today. Although these figures could bring further action in GBP/USD, the sentiment may alter a little.

GBP/USD price technical analysis: Fresh highs above 1.3700

GBP/USD 4-hour price chart
GBP/USD 4-hour price chart

The GBP/USD price found strong demand around the 150% Fibonacci line of the descending pitchfork. After several false breakouts above the weekly S1 (1.3662), the pair finally managed to ignore the immediate highs and climb as much as 1.3725.

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The immediate upside target is seen at the first warning line (wl1) of the descending pitchfork. Still, the price could come back to test and retest the 1.3693 and the 1.3689 broken levels in the short term before resuming its upside journey. Worse than expected, US data may boost the pair, which could also jump above the warning line (wl1).

Technically, making a valid breakout through the warning line (wl1) could signal further growth towards 1.3750 and up to the 1.38 psychological level. On the other hand, the GBP/USD could turn to the downside anytime as long as it stays under the warning line (wl1). From the technical point of view, the GBP/USD moves sideways between 1.3571 and 1.4001 levels.

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