by SignalFactory · November 5, 2020 | 12:22:57 UTC
The GBP/USD pair built on its steady intraday positive move and shot to fresh session tops, around the 1.3050 regions in the last hour.
The pair managed to attract some dip-buying on Thursday and has now recovered over 100 pips from daily swing lows, around the 1.2930 regions touched during the early European session. Expectations that Democrat challenger Joe Biden will be the next US president kept the US dollar bulls on the defensive and helped limit the early slide.
Meanwhile, the British pound got an additional boost after the Bank of England (BoE) refrained from cutting interest rates into negative territory. Meanwhile, the BoE expanded its Asset Purchase Program by £150 billion to cushion the UK economy from the damage caused by the second nationwide lockdown to curb the COVID-19 outbreak.
As investors looked past Thursday’s key central bank event, developments surrounding the Brexit landscape will now play a key role in influencing the sentiment surrounding the sterling. Apart from this, the USD price dynamics will be looked upon for some short-term trading opportunities ahead of the FOMC policy update later this Thursday.
In the meantime, the release of usual Initial Weekly Jobless Claims will be looked upon for some short-term trading opportunities during the early North American session.
The GBP/USD pair rallied around 60-65 pips post-BoE announcement and shot to fresh session tops, around the key 1.3000 psychological marks, albeit lacked follow-through.
The pair extended the previous day’s sharp intraday pullback from near two-week tops, around the 1.3140 regions, and witnessed some follow-through selling through the Asian session on Thursday. The GBP/USD pair, however, stalled its intraday slide and managed to rebound swiftly from the 1.2930 area after the Bank of England decided to leave benchmark interest rates unchanged at 0.10%.
The supporting factor, to a larger extent, was offset by a larger than expected increase in the size of the BoE’s asset purchase program, which now stands at £875 billion, up from £745 billion prior. Adding to this, the UK central bank also showed readiness to increase QE further if market functioning worsens and said that risks to the economic recovery remain skewed to the downside.
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