Cable fell to 1.35 zone on bearish acceleration from session high at 1.3617, after Bank of England was in neutral hold in May’s meeting.
The central bank kept rates unchanged as expected and previous meeting vote came in line with expectations (7/2) but said that more evidence about growth acceleration are needed after slowdown in the first quarter.
Initial strong expectations about rate hike in May policy meeting diminished in just two weeks, as series of downbeat key UK data cooled down hopes that BoE would raise interest rates.
The price fell to the lower boundary of consolidation range which extends into fifth straight day, after strong acceleration higher earlier today cracked the upper boundary, reinforced by falling 10SMA, but dovish tone from Fed sent pound sharply lower.
Further directionless mode could be expected while the price remains within the range, with focus on today’s close against 200SMA which would give fresh signal. Close below would generate initial negative signal while repeated close above 200SMaA would keep in play existing basing attempts.
Stronger direction signal could be expected on break of either side (1.3486 – range floor or 1.36 – range ceiling / falling 10SMA).
Res: 1.3600; 1.3617; 1.3629; 1.3665
Sup: 1.3500; 1.3484; 1.3442; 1.3400