Yesterday the Bank of England raised the benchmark rate from 0.75% to 1.00%, but the pound, it would seem, paradoxically collapsed by 274 points (-2.18%). Of course, there were formal reasons for this, such as the decrease in the BoE forecast for economic growth for 2023 from 1.25% to -0.25%, while the forecast for the current year was kept at a loss of 3.75%.
The BoE sees the main problem in this are the ongoing epidemiological lockdowns in China, the long recovery of supply chains, and inflation in England this year from 5.75% to 10.25%. But in general, the pound did not fall on its own, but against the backdrop of the dollar’s large-scale attack after its temporary weakening on Wednesday.
The S&P 500 stock index fell by 3.56%, the Nasdaq by almost 5% (-4.99%), the yield on 5-year US government bonds increased from 2.93% to 3.05%, copper fell by 1.87%, that is, there was a very large-scale withdrawal of investors from the risk.
On the daily chart, the GBP/USD pair has overcome the support range of 1.2436/76, now the price has the following target levels: 1.2250 is the June 2020 low, 1.2073 is the May 2020 low. On the four-hour chart, the price is declining below both indicator lines, the Marlin Oscillator is declining in the negative area.
*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.
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