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  • GBP/USD edged lower for the second consecutive session on Thursday, despite softer USD.
  • The latest BoE policy update did little to impress traders or provide any meaningful impetus.
  • The BoE left interest rates unchanged and increased the size of its QE program to £875 billion.

The GBP/USD pair rallied around 60-65 pips post-BoE announcement and shot to fresh session tops, around the key 1.3000 psychological mark, albeit lacked follow-through.

The pair extended the previous day’s sharp intraday pullback from near two-week tops, around the 1.3140 region, and witnessed some follow-through selling through the Asian session on Thursday. The GBP/USD pair, however, stalled its intraday slide and managed to rebound swiftly from the 1.2930 area after the Bank of England decided to leave benchmark interest rates unchanged at 0.10%.

The supporting factor, to a larger extent, was offset by a larger than expected increase in the size of the BoE’s asset purchase program, which now stands at £875 billion, up from £745 billion prior. Adding to this, the UK central bank also showed readiness to increase QE further if market functioning worsens and said that risks to the economic recovery remain skewed to the downside.

Meanwhile, the GBP/USD pair struggled to capitalize on the attempted recovery move and was last seen trading with modest losses, around the 1.2970 region. Even a mildly softer tone surrounding the US dollar failed to impress bulls or provide any meaningful impetus. The greenback suffered a blow after former vice president Joe Biden increased his lead in a nail-biting US election.

Moving ahead, the focus now shifts to the FOMC monetary policy update, scheduled to be announced later during the US session. This, along with US political developments, will influence the USD price dynamics and produce some short-term trading opportunities around the GBP/USD pair.

Technical levels to watch