The price of GBPUSD could rally further after the Bank of England’s commitment to fighting the inflation rate will see interest rates move higher. Will the price of cable trade higher?
Watch the video to learn more…
The Bank of England Governor Bailey was speaking at London School of Economics
in which he spoke of the need to bring inflation rates down in the UK. The Inflation rate in the UK as of February is 10.4%. This is well above the targets for the-Bank of England which is 2%. The Governor said they would use interest rate hikes as a tool to bring the inflation rate down. He also spoke about the resilience in the banking sector and that they are well funded and supported.
If the Bank of England continues to raise interest rates, the GBPUSD price will likely trade higher towards key resistance levels. The price is trading between two key levels within a range, the range highs is 1.2400 and the lows is 1.1850. Within this trading range there is a minor trading range between highs of 1.2325 and 1.2200. If the price breaks out of the highs of the range it could offer traders who want to be long, an opportunity to target the highs at 1.2425. If the price moved lower back to the support of 1.2200 and buyers stepped in it could see price trade higher.
The price on the chart has traded through multiple technical levels and some observations included:
- The price is trading between a weekly trading range with highs of 1.2425 and 1.1850.
- Currently the price is trading in a minor range and highs of 1.2325.
- If the price breaks this high we could expect the price to trade to the range highs.
Have you watched our GBPAUD analysis? You can see it here.
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