GBPUSD bounces after the BOE rate cut news runs its course

The GBPUSD experienced steady declines during the Asian session and ahead of the BOE rate decision. The Bank of England cut rates by 25 basis points, as widely expected, but the fact that two members voted for a more aggressive 50 basis point cut added to the bearish sentiment. This pushed the pair lower into a swing area between 1.23515 and 1.23759, where buyers found support and started to reverse the downward momentum.

The recovery gained traction, with the pair climbing towards the 100-hour moving average at 1.24269 and the 200-hour moving average at 1.24356, which now serve as key resistance levels. These technical levels are critical short-term barometers, and sellers are expected to lean against them, using stops above in case of a breakout. For the GBPUSD to sustain further upside momentum, a decisive move above these moving averages would be required.

For now, sellers appear to be attempting to maintain control and protect the bearish bias. If the price remains below these resistance levels, it reinforces the downward pressure, potentially leading to another test of the swing area. However, a break above the moving averages could signal a shift in sentiment and open the door for further upside probing.

BOE Bailey is expected to give a TV interview shortly.

The market now sees a May cut and a total of 64 basis points of cuts between now and the end of the year. That is up from about 58 basis points before the rate decision.

This article was written by Greg Michalowski at www.forexlive.com.