GBP/USD volatile around 1.3050 following the BoE event

• Cable trims earlier gains and returns to 1.3050.
• BoE kept monetary policy unchanged today.
• MPC voted unanimously to keep current status quo.

The Sterling struggles for direction following the BoE steady stance at today’s meeting, motivating GBP/USD to gyrate around the 1.3050 area for the time being.

GBP/USD weekly upside capped by 1.3100

Cable eased from earlier tops after the Bank of England kept the refi rate at 0.75%, the asset purchase facility at £435 billion and the purchase of corporate bonds at £10 billion, all in line with prior surveys.

Furthermore, the MPC voted unanimously to keep the steady stance on monetary policy and the BoE also signaled that it is needed more than a rate hike to keep inflation in check.

From the Inflation Report, the central bank has revised lower its forecasts for economic growth and it now sees the economy expanding 1.5% this year, 1.6% next year and 2.1% in 2021. In addition, the BoE sees consumer prices running above the bank’s target at the end of the forecast horizon.

GBP/USD levels to consider

As of writing, the pair is gaining 0.05% at 1.3055 and faces initial hurdle at 1.3102 (high May 1) seconded by 1.3132 (high Apr.12) and then 1.3196 (high Apr.3). On the flip side, a breakdown of 1.3011 (21-day SMA) would expose 1.2960 (200-day SMA) and finally 1.2865 (low Apr.25).