GBP/USD: outlook for August 8-14
The Bank of England eased monetary policy in order to reduce uncertainty caused by Brexit. The regulator cut the benchmark interest rate from 0.5% to 0.25% and expanded bond buying by 60 billion pounds of government bonds and 10 billion pounds of corporate bonds. The BoE also set up a new funding scheme for lenders.
This easing package has exceeded the market’s expectations. Note that Governor Carney said that further interest rate cuts are possible, though underlined that the rates will remain above 0. Still, given solid US labor market figures British pound will likely remain under negative pressure versus the US dollar.
GBP/USD fell below 1.3100. The pair breached down the triangle and the next levels to watch on the downside are 1.3000, 1.2950 and 1.2840. Resistance is at 1.3100 and 1.3210.
As for British economic calendar, important pieces of data are due on Tuesday: don’t miss the releases of manufacturing production and goods trade balance.