GBP/USD resumes BOE-led weakness, heading back to session low

After a tepid recovery attempt to 1.3180, the GBP/USD pair resumed its BOE-led slide and has now moved back close to session low level.

The pair witnessed intense selling pressure and plummeted by over 200-pips from session high after the BOE announced expansion of its Asset Purchase Facility by £60 billion to £435 billion. Adding to the bearish sentiment, the central bank in its quarterly inflation report lowered its growth forecast to 0.8% in 2017 from earlier estimate of 2.3%. 

Meanwhile, the decision to slash its benchmark rates for the first time in seven years by 25 bps point to a new record low 0.25% as broadly in-line with market expectations. 

Moreover, a slight miss in the US weekly jobless claims failed to provide any respite for the pair. Focus now turns to Friday's NFP data, which if surprises on the upside would exert further selling pressure around the GBP/USD major in the near-term.

Technical outlook

Valeria Bednarik, Chief Analyst at FXStreet, notes, "The pair remains below the 1.3200 mark, and the 1 hour chart shows that technical indicators are bouncing modestly from oversold territory, but also that the price remains well below a bearish 20 SMA, and given the BOE's outcome, the risk remains towards the downside, with approaches to the 1.3200 region probably attracting selling interest. In the 4 hours chart, the price has broken below its 20 SMA, currently at 1.3268, while the technical indicators head south below their mid-lines, in line with further declines for today."

"Support levels: 1.3160 1.3110 1.3070
Resistance levels: 1.3200 1.3245 1.3290"