Big Ben with people on bridge in the evening, London, England, United Kingdom. Image source: Tomas Marek © 123RF.com
As anticipated, the Monetary Policy Committee (MPC) of the Bank of England decided to maintain the near-negative Official Bank Rate unchanged at 0.10 per cent. At its December meeting, which was held earlier today, the decision was reached unanimously by all nine members of the Committee.
The Committee's deliberations closely mimic FOMC 's revelations from yesterday in that BOE's monetary policy stance will not change drastically at the present rate. Namely, the Bank's Asset Purchase Facility will not be scaled up just now, despite the ongoing Brexit tribulations.
"The Committee voted unanimously for the Bank of England to continue with the programme of £100 billion of UK government bond purchases, financed by the issuance of central bank reserves, and also to commence the previously announced programme of £150 billion of UK government bond purchases, financed by the issuance of central bank reserves, maintaining the target for the stock of these government bond purchases at £875 billion and so the total target stock of asset purchases at £895 billion."
The market was mostly anticipating such a decision by the MPC, which is why the ultimate outcome of the meeting did not stir a lot of adverse volatility. Meanwhile, the pound continued with its strengthening following the publication of the monetary policy statement.
As can be seen on the 4H chart below, the GBPUSD currently finds itself at a multi-year peak. The pair is presently establishing an impulse leg following the finalisation of the Wedge pattern.
Moreover, the breakout above the Wedge coincided with the breakout above the major resistance level with psychological significance at 1.34000. All of this manifests the strong bullish bias at present.
Nevertheless, it should also be mentioned that the price action appears to be in the process of establishing a Shooting Star candle, which could potentially signify the emergence of a new bearish correction.
Such expectations are further substantiated by the fact that the underlying levels of trading volume have been depreciating consistently over the last few days.
GBPUSD 4H Price Chart. Image source: Trendsharks ©, created with TradingView.com
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