After a rapid decline in the first days of January GBP/USD got caught between 1.52 and 1.50. Here are the psychologically important levels as well as the support line connecting 2010 and 2013 lows.
The next Bank of England’s meeting will take place on February 5: no changes in monetary policy are expected. The UK regulator still remains in a hawkish trend, but sees no rush in raising rates amid slowing inflation. When started, the rate increases could be as slow as half a percentage point a year, the central bank’s chief economist Andy Haldane said in an interview this week.
All in all, British pound has better chances vs. USD than the other major currencies. At the same time, GBP/USD remains within a downtrend. There’s still some room for consolidation. Resistance is at 1.5350 and 1.5400. The next support is at 1.4919 and 1.4813.
In the first half of the next week the UK will release important manufacturing, construction and services PMIs – these releases will influence the Bank of England’s mood and the market’s attitude to GBP.