Pound Jerks With BOE Meeting Surprise, This Happens On GBP/USD Chart!

<p>&nbsp;The focus is on the results of the central bank of England meeting at 7pm yesterday with an expected interest rate increase of 25 basis points to be implemented.</p><p><br /></p><p>However, the Bank of England (BOE) surprised the market by raising interest rates by 50 basis points from 4.50% to 5.00%!</p><p><br /></p><p>This follows the release of UK inflation data last Wednesday which remained at a high level at 8.7% missing forecasts for a slight decline.</p><p><br /></p><p>The initial reaction after the results of the meeting, the Pound currency jumped for a moment before surprising by plunging again and trading gloomy throughout the New York session yesterday.</p><p><br /></p><p><br /></p><p><br /></p><p>This can be seen on the chart of the GBP/USD currency pair with its initial surge after the BOE shock, reaching last week's high around 1.24800.</p><p><br /></p><p>But right after that, the price continued to plunge again by more than 100 pips and started to move below the Moving Average 50 (MA50) level on the 1-hour time frame on the chart.</p><p><br /></p><p>Investors began to worry about the risk of a UK economic recession following the BOE's aggressive actions causing the Pound to decline. However, if the BOE continues to raise policy, the Pound has the potential to strengthen again after this.</p><p><br /></p><p><br /></p><p>Continuing trading today (Friday), saw the price continue to show a decline in the Asian session heading back to 1.27000 to test the RBS (resistance become support) zone.</p><p><br /></p><p>If the level fails to bounce back like last Wednesday, it is possible that the price could fall lower after breaking through it and head towards the target level at 1.26000.</p><p><br /></p><p>A further drop lower is seen to reach 1.25000 and the price reaction in that zone will be watched by investors.</p><p><br /></p><p>Meanwhile, if there is a rebound in the price after this, the price will try to cross the MA50 barrier before it can give an indication for a further increase.</p><p><br /></p><p>The high level of 1.28400 reached yesterday will try to be reached again which was also the resistance level in last week's trading.</p><p><br /></p><p>Next, successfully breaking through that resistance will push the price to reach the concentration level at 1.29000 while also breaking the latest record high since April 2022.</p>