The GBP/USD currency pair traded firmly near a two-month high of approximately 1.3610 during the European session on Friday, reflecting notable strength in the Pound Sterling following the Bank of England’s (BoE) latest monetary policy decision [1]. The BoE opted to keep interest rates unchanged at 3.75% with an 8-1 majority, as anticipated by the market. During the post-meeting press conference, BoE Governor Andrew Bailey emphasized the central bank's readiness to raise rates if there are signs of second-round effects from higher energy prices on inflation, stating, 'It would be a mistake to wait to see the second-round effects before acting because then it would be too late,' according to Reuters [1].
The Cable's outperformance was further supported by the continued underperformance of the US Dollar. The US Dollar Index (DXY) was reported to be trading slightly higher near 98.20 but remained close to its 10-day low of 98.00, contributing to the GBP/USD's bullish momentum [1]. Market participants are also awaiting the US ISM Manufacturing PMI data for April, scheduled for release at 14:00 GMT, with expectations for a reading of 53.0 compared to 52.7 in March [1].
From a technical perspective, GBP/USD maintains a constructive bullish bias, holding above the 20-day Exponential Moving Average (EMA) at 1.3491 and the 50% Fibonacci retracement at 1.3514 of the 1.3159–1.3870 move. The Relative Strength Index (14) stands at 60.3, indicating positive momentum without overbought conditions, suggesting further upside potential for buyers [1]. Key resistance levels are identified at the 78.6% retracement at 1.3717 and the cycle high near the 100% retracement at 1.3870, provided the pair sustains above the 61.8% retracement at 1.3600. On the downside, initial support is seen at the 50% Fibonacci level at 1.3514 and the 20-day EMA at 1.3491, with deeper support at 1.3430, 1.3327, and 1.3159 [1].
CONCLUSION
The GBP/USD pair is exhibiting strength near a two-month high, buoyed by the Bank of England's steady policy stance and the underperformance of the US Dollar. Technical indicators suggest further upside potential, with key resistance levels in focus as market participants await US economic data for additional direction.