Global macro analysis for 04/08/2016:
The Bank of England has cut the interest rate to the record low level of 0.25% this morning and it was first rate cut since 2009. Moreover, BoE has expanded the stimulus to 170bln pounds funded by newly printed money: 60bln pounds more quantitative easing in form of buying government debts, 10bln pounds for corporate bond purchases and up to 100bln pounds towards new term funding scheme for banks. The majority of MPC says the BoE might cut the rates further lo lower the bound (just above zero). The forecast regarding the UK economy is not optimistic, but so far the UK narrowly avoids recession. The GDP has been slashed to 0.8% in 2017.
Let's now take a look at the GBP/USD technical picture at the daily time frame after the BoE rate cut. The market trades below all of the moving averages and slides towards the next support at the level of 1.3058. Nevertheless, the price still trades inside of the congestion zone and no clear break out has been done yet.
