GBPUSD Rallies on BOE's 'Hawkish Hold'

Bailey Holds SteadyGBP is starting the day in a more muted fashion, on the back of the November BOE meeting yesterday. The Pound was seen firmly higher through Thursday trading as traders digested a ‘hawkish hold’ from Bailey and co. The BOE held rates steady at 5.25% but signalled that rates would need to stay at elevated levels for an extended period of time and, pending incoming inflation data, might still need to rise further.  This outlook comes on the back of recent data showing that UK inflation stalled at 6.7% in September after dropping sharply in August.Growth to Fall But Too Early to Consider Rate CutsLooking ahead, the BOE signalled that growth would likely stay “well below historical averages” in the medium term, though warned “it’s much too early to be thinking about rate cuts.” Indeed, 3 of the 9 voting members dissented and voted in favour of a further .25% hike, showing the hawkish pressure still within the BOE. Given Bailey’s guidance and the voting split, GBP risks appear very much skewed to the upside in coming months. Should we see any fresh uptick in inflation, surging BOE rate hike bets have room to lift the Pound higher keeping GBP long opportunities firmly on the table.Technical ViewsGBPUSDThe market continues to hold around the 1.2171 level for now as price tests above the bear channel highs. With bullish divergence seen in momentum studies over the last month, the focus is on a break higher here and a move up to the 1.2437 level next which will be a key pivot for the market.