The Bank of England raised the main interest rate by 25 bps to 0.75% in line with expectations, thanks to which for the first time since 2009 they were above 0.50%. Although almost everyone expected the increase, it was hardly anyone predicted that all MPC members would support it. Ultimately, however, the entire nine signaled the need for such a move. In addition, in the statement of monetary policy, there was a statement that "further hikes will be needed", which gave the pound another impulse for growth. The GBP appreciation did not last too long: a hawkish increase in interest rates, the announcement of a desire to further normalize monetary policy in the future and a positive outlook on economic forecasts proved to be insufficient. During the BoE press conference, BoE Governor Mark Carney was asked about the condition of business investments. He admitted that there are signs of their slowdown caused by fears about the future and macroeconomic landscape after the divorce of the UK with the EU. This statement had a very negative impact on the moods of the bulls, allowing the bear to charge GBP towards daily lows and started a broad weakening across the board.
In the other news, the latest PMI results for the construction sector in the UK were published. Analysts assumed that the July PMI would slow down to 52.8 from 53.1 previously. The final result at 55.8 turned out to be a positive surprise. It is also worth noting that it is the highest indicator since May 2017. The business activity of British construction companies has significantly increased, which was supported by the fastest growth in jobs for more than two and a half years. Housing construction is developing at the sharpest pace since December 2015. The momentum of new orders growth and the creation of new jobs is also gaining momentum.
Let's now take a look at the GBP/USD technical picture at the H4 time frame. After the BoE interest rate decision and Carney comments, the pair has broken below the blue trend line support around the level of 1.3095 and plummet further towards the next technical support at the level of 1.3050. This one was violated as well and finally, the price has found a support around the level of 1.3007. Currently, the bulls are trying to bounce from the support, but negative and weak momentum indicates this is only a temporary bounce. The key technical support zone is seen between the levels of 1.2955 - 12990.
