21.06.201900:33 Forex Analysis & Reviews: GBPUSD: The pound is growing after the Bank of England's decision not to change the monetary policy

The British pound continued its growth against the US dollar, completely ignoring the weak report on retail sales. The demand for the pound has been observed since the beginning of the week, when it became clear that the monetary policies of the Bank of England and the US Federal Reserve may begin to diverge in different directions. In other words, the central bank of England will not lower interest rates, while the Fed intends to do this, which, although indirectly, was mentioned at Fed Chairman Jerome Powell's press conference yesterday.

As I noted above, retail sales in the UK fell in May of this year, and one of the main reasons are adverse weather conditions, which negatively affected the demand for summer wardrobe items. This once again confirms the fact that the UK economy is unlikely to show good growth rates in the 2nd quarter of this year and, at best, will only keep them.

According to the UK National Bureau of Statistics, retail sales in the UK fell by 0.5% in May compared with April. Fall is observed for the second month in a row. Between March and May, UK retail sales rose by only 1.6%, after rising 1.7% between February and April.

Economists had expected a similar decline in retail sales, which also kept pressure on the British pound before the publication of the Bank of England report on interest rates.

According to the data, the Bank of England left the key interest rate at the level of 0.75%, and the decision to keep the key rate at the same level was made at a ratio of 9 to 0.

The central bank noted that downside risks for GDP growth have increased, and therefore GDP growth will remain unchanged in the 2nd quarter. The regulator also expects that this year inflation will be below the target level of 2%, which will "slow down" with a further increase in interest rates in the context of growing uncertainty with Brexit.

Let me remind you that today Boris Johnson, who is the most likely successor of Theresa May as prime minister, moved ahead in the fourth round of voting with 157 votes. Johnson is a hard advocate of Brexit, which in the future could create serious problems for the economy.

The Bank of England expects a limited and gradual increase in interest rates in the event of a smooth Brexit.

As for the technical picture of the GBPUSD pair, growth was restrained by a large resistance level around 1.2730, and currently there is some downward correction in the support area of 1.2640, which will make it possible for large buyers to build the lower boundary of the new upward channel capable of continuing the current trend. The main weekly goal of the bulls will be a high in the area of 1.2760.