Pound Plunges on Surprise BoE Decision
The Pound Sterling (GBP) tumbled sharply against the US Dollar (USD) on Thursday after the Bank of England's (BoE) monetary policy decision.
BoE Holds Rates Steady: The BoE, as expected, kept interest rates unchanged at 5.25%.
- Surprise Rate Cut Votes: However, two policymakers, Swati Dhingra and Dave Ramsden, unexpectedly voted for a rate cut, spooking investors.
- Lower Inflation Forecasts: The BoE revised down its inflation forecasts, predicting a decline to 1.9% in Q2 2025 and 1.6% in Q2 2026.
- GBP/USD Slides: The GBP/USD pair plummeted to 1.2450, pressured by the prospect of a dovish shift from the BoE.
Technical Analysis: GBP/USD Under Pressure
- The GBP/USD extended its decline for the third consecutive day.
- The pair broke below the 20-day EMA (Exponential Moving Average) at 1.2510, indicating a potential shift in momentum.
- The breakdown below the Head and Shoulders (H&S) pattern neckline adds to the bearish sentiment.
- The RSI hovering around 50 suggests indecision among market participants, but a sustained move below could signal further weakness.
Overall, the near-term outlook for the Pound is uncertain. The surprise dovish tilt from the BoE and the technical breakdown of the H&S pattern create downside risks. Investor focus will likely shift to upcoming economic data and BoE pronouncements for further clues about the future trajectory of monetary policy.