13.09.201817:36 Forex Analysis & Reviews: Global macro overview for 13/09/2018

In line with the broad market consensus, the Bank of England (BoE) decided not to raise its main interest rate and keep it at 0.75%, which was unanimously adopted by the nine-member composition of the British Monetary Policy Council. However, the institution announced an increase in its forecasts for the gross domestic product (GDP), and the pound sterling responded to the Super Thursday decision with a gentle strengthening to rebound at the next moment from the new session highs.

BoE's monetary policy statement said that the official interest rate was maintained at the highest level of 0.75% in almost a decade, the target level of asset purchase at GBP 435 billion, and corporate bond purchase at GBP 10 billion. The decision makers of the institution also stated that the recent economic situation allows an increase in the quarterly GDP projection (Q3 2018) to 0.5% q / q from 0.4% q / q reported in August. Once again, the bank confirmed that further monetary policy tightening is necessary, alleviating hawkish comments with the statements about the need to track macroeconomic data and the need for "gradual and limited" interest rate hike. Compared to the last month's statement, it is difficult to find significant changes in the BoE rhetoric, and the unanimous decision to keep interest rates in check confirms that the bank has no intention of normalizing its policy in the next few months.

Let's now take a look at the GBP/USD technical picture at the H4 time frame. The markets were afraid that the Bank of England will focus on potential risks related to Brexit, but this topic has not been given too much attention, so the meeting of the institution can be described as a non-event, which does not bring a stronger confusion on the market. Currently, the market is moving higher towards the next technical resistance at the level of 1.3191 and if this resistance is violated, then the trend will likely change to up trend.