BOE Raises Rates 0.25%! GBP/USD Falls Earlier Before Bouncing To $1.2700

<p>&nbsp;In line with forecasts, the Bank of England (BOE) raised interest rates by 25 basis points at its latest policy meeting yesterday.</p><p><br /></p><p>The interest rate increased to 5.25% which is the highest level for a period of 15 years.</p><p><br /></p><p>The policymakers vote was split with 2 voting for a 50 basis point hike and one for keeping rates.</p><p><br /></p><p>Markets are somewhat at a loss to determine the direction of the BOE's monetary policy further and analysts are wary of expectations that the policy tightening measures are nearing an end.</p><p><br /></p><p>The Pound weakened after the rate decision was announced but recovered slightly as trade moved towards the close of the New York session.</p><p><br /></p><p><br /></p><p><br /></p><p>If observed on the chart of the GBP/USD currency pair, the price dropped to reach the level of 1.26200 following the initial reaction to the results of the BOE meeting yesterday.</p><p><br /></p><p>However, the price gradually increased again until it managed to pass the 1.27000 level while the US dollar began to lose momentum awaiting the NFP employment data report today.</p><p><br /></p><p><br /></p><p>The slow price increase continued in the Asian session this morning (Friday) and has crossed the Moving Average 50 (MA50) barrier level on the 1-hour time frame on the GBP/USD chart.</p><p><br /></p><p>If the increase succeeds in continuing higher, the initial resistance at 1.28000 needs to be broken before the price can continue its increase towards the concentration level of 1.29000.</p><p><br /></p><p>If that level is also broken, the target will shift to last week's resistance level at 1.30000.</p><p><br /></p><p>On the other hand if the price plunges back at the close of trading this week, the 1.26000 zone will be tested after the price breaks through yesterday's level.</p><p><br /></p><p>A continued decline could reach around 1.25000 for the price's latest record low for 7 weeks.</p>