- The British pound gained some traction in reaction to the BoE policy decision.
- The BoE leaves rates unchanged and expands QE program by £100 billion.
- Sliding US bond yields undermined the greenback and remained supportive.
The GBP/USD pair has managed to recover a major part of its early lost ground and moved back closer to session tops, post-BoE.
The pair extended this week's rejection slide from the very important 200-day SMA and witnessed some follow-through selling for the third consecutive session on Thursday. The intraday downfall took along some short-term trading stops near the key 1.2500 psychological mark and dragged the pair to multi-day lows.
The pair, however, attracted some dip-buying near the 1.2475 region and gained some traction after the Bank of England (BoE) announced its policy decision. As was widely expected, the BoE left the benchmark interest rate unchanged at 0.1% and increase the size of its quantitative easing program by £100 billion.
The outcome seemed to have disappointed some analysts, expecting a larger increase in the QE amid concerns about the economic outlook. This, in turn, prompted some short-covering move around the British pound and contributed to the GBP/USD pair's strong intraday bounce of around 70 pips from the daily swing lows.
This coupled with the emergence of some fresh US dollar selling bias, amid a weaker tone surrounding the US Treasury bond yields, might assist the pair to capitalize on its the momentum. Some follow-through buying beyond the daily swing highs, around the 1.2565 region, will set the stage for a move towards reclaiming the 1.2600 mark.
Technical levels to watch
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