GBP/USD – Sinks to three-month low after BoE monetary policy report hearing

<p><a href="https://api.addthis.com/oexchange/0.8/forward/facebook/offer?url=https%3A%2F%2Fwww.marketpulse.com%2Fforex%2Fgbp%2Fgbp-usd-sinks-to-three-month-low-after-boe-monetary-policy-report-hearing%2Fcerlam&amp;pubid=ra-525512e4690e068c&amp;title=Marketpulse%20%7C%20Home&amp;ct=1" target="_blank"><img src="https://cache.addthiscdn.com/icons/v3/thumbs/32×32/facebook.png" border="0" alt="Facebook" /></a><a href="https://api.addthis.com/oexchange/0.8/forward/twitter/offer?url=https%3A%2F%2Fwww.marketpulse.com%2Fforex%2Fgbp%2Fgbp-usd-sinks-to-three-month-low-after-boe-monetary-policy-report-hearing%2Fcerlam&amp;pubid=ra-525512e4690e068c&amp;title=Marketpulse%20%7C%20Home&amp;ct=1" target="_blank"><img src="https://cache.addthiscdn.com/icons/v3/thumbs/32×32/twitter.png" border="0" alt="Twitter" /></a><a href="https://api.addthis.com/oexchange/0.8/forward/email/offer?url=https%3A%2F%2Fwww.marketpulse.com%2Fforex%2Fgbp%2Fgbp-usd-sinks-to-three-month-low-after-boe-monetary-policy-report-hearing%2Fcerlam&amp;pubid=ra-525512e4690e068c&amp;title=Marketpulse%20%7C%20Home&amp;ct=1" target="_blank"><img src="https://cache.addthiscdn.com/icons/v3/thumbs/32×32/email.png" border="0" alt="Email" /></a></p><ul>
<li><strong>Dovish BoE commentary weighs on the pound</strong></li>
<li><strong>Two more rate hikes are still heavily priced in</strong></li>
<li><strong>Major support below around the 200/233-day SMA band</strong></li>
</ul>
<p>The monetary policy report hearing can often be a much-hyped but ultimately anti-climactic event, with policymakers sticking to the script whenever possible and the Treasury Select Committee frequently blurring the lines between politics and central banking.</p>
<p>While that was probably largely true today, it was interesting that Governor Bailey and his colleagues share the view that there is no pre-determined outcome at the next meeting &#8211; hike or no hike &#8211; which isn&#8217;t something that can be said over much of the last couple of years.</p>
<p>A rate hike is still extremely likely at the next meeting on 21 September (82.8% priced in) and one more is still almost fully priced in, which is arguably a surprise based on today&#8217;s comments.</p>
<p><strong>BoE Interest Rate Probabilities</strong></p>
<p><a href="https://www.marketpulse.com/wp-content/uploads/2023/09/BoE-Probability.png" target="_blank" rel="noopener"><img loading="lazy" class="aligncenter wp-image-807405" src="https://www.marketpulse.com/wp-content/uploads/2023/09/BoE-Probability-1024×496.png" alt="" width="620" height="300" srcset="https://www.marketpulse.com/wp-content/uploads/2023/09/BoE-Probability-1024×496.png 1024w, https://www.marketpulse.com/wp-content/uploads/2023/09/BoE-Probability-300×145.png 300w, https://www.marketpulse.com/wp-content/uploads/2023/09/BoE-Probability-768×372.png 768w, https://www.marketpulse.com/wp-content/uploads/2023/09/BoE-Probability-1536×744.png 1536w, https://www.marketpulse.com/wp-content/uploads/2023/09/BoE-Probability.png 1871w" sizes="(max-width: 620px) 100vw, 620px" /></a></p>
<p>Source &#8211; Refitiv Eikon</p>
<p><iframe loading="lazy" width="560" height="315" src="https://www.youtube.com/embed/wDZI9DS4Hzo?si=HMFJSgmsNdH1VEL6" title="YouTube video player" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" allowfullscreen></iframe></p>
<p><script src="https://apis.google.com/js/platform.js"></script></p>
<div data-channel data-layout="default" data-count="default"></div>
<p><strong>Sterling slides after dovish commentary</strong></p>
<p>The pound clearly responded to the comments during the hearing, slipping against the dollar to a three-month low.</p>
<p><strong>GBPUSD Daily</strong></p>
<p><a href="https://www.marketpulse.com/wp-content/uploads/2023/09/GBPUSD_2023-09-06_22-36-07.png" target="_blank" rel="noopener"><img loading="lazy" class="aligncenter wp-image-807406" src="https://www.marketpulse.com/wp-content/uploads/2023/09/GBPUSD_2023-09-06_22-36-07-1024×412.png" alt="" width="621" height="250" srcset="https://www.marketpulse.com/wp-content/uploads/2023/09/GBPUSD_2023-09-06_22-36-07-1024×412.png 1024w, https://www.marketpulse.com/wp-content/uploads/2023/09/GBPUSD_2023-09-06_22-36-07-300×121.png 300w, https://www.marketpulse.com/wp-content/uploads/2023/09/GBPUSD_2023-09-06_22-36-07-768×309.png 768w, https://www.marketpulse.com/wp-content/uploads/2023/09/GBPUSD_2023-09-06_22-36-07-1536×619.png 1536w, https://www.marketpulse.com/wp-content/uploads/2023/09/GBPUSD_2023-09-06_22-36-07.png 1793w" sizes="(max-width: 621px) 100vw, 621px" /></a></p>
<p>Source &#8211; OANDA on Trading View</p>
<p>What&#8217;s more, that was seemingly backed by momentum, with the stochastic and MACD both recording lower lows at the same time. It also confirmed the rebound off the 55/89-day simple moving average band last week which looked quite a bearish move at the time.</p>
<p>The focus now is on the 200/233-day SMA band, a break of which would further solidify the bearish appearance in the pair. This falls around 1.23-1.24, around the May lows and an area that was firm support in the second quarter of the year.</p>