GBP/USD Price Looks Neutral at mid-1.3600 After Fed, Awaits BoE

• GBP/USD gained on Wednesday after Fed’s decision but could not retain gains.
• Fed’s rate hike plan is still not clear, keeping the Greenback bulls on the backfoot.
• BoE’s rate decision is due on the day, creating huge uncertainty in the market.

The GBP/USD price gained 0.51% on Wednesday following the Fed’s decision, rebounding from Tuesday’s two-week low of 1.3602. However, the price could not sustain gains near 1.3700 and fell back to 1.3650 area.

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In its announcement on Wednesday, the Fed said it would begin to reduce assets purchase in November by $15 billion. Despite this, Fed Chairman Jerome Powell said that the central bank will be “patient” about raising rates.

Following the US Federal Reserve’s recent decision, the US dollar gained ground against the euro and pound sterling Thursday morning.

The Bank of England (BOE) will announce its monetary policy decision later in the day, the latest in a series of monetary policy decisions.

Since the COVID-19 pandemic began, the Bank of England could be the first major central bank to raise interest rates. However, the Bank of England’s decision has been met with less consensus among investors.

If the Fed raises rates, it will mark a radical shift in policy from the September meeting, but it would not mean the end of the world. Although a decision is unlikely to be unanimous, we only know of two. First, the rate hike from 0.15% to 0.25% may align with the UK’s economic recovery since March 2020.

Given their recent political comments, Tenreiro and Mann are more likely to vote against the rate hike. This will likely be a split decision and made by an odd vote, but especially if the UK economy cannot withstand a rate hike of 0.15%, we are indeed in very dire straits.

Additionally, if the markets are huddled in a corner, they might be very adamant if the bank doesn’t keep its promises along the garden path. So rather than a rate hike today or at next month’s meeting, the key will be how the central bank handles the announcement of further rate hikes.

If available, a dovish hike can be taken as part of forward guidance. It would be devastating to confidence in central banks if today’s results do not materialize, leading to the pound declining and exaggerating inflation.

According to today’s inflation report, the central bank will raise its inflation forecast and adjust its growth forecast simultaneously.

Furthermore, weekly claims for unemployment benefits in the US are expected to decline to 275,000, and the number of ongoing claims will decline to 2.15 million, below 2.2 million.

GBP/USD price technical analysis: Bulls vs. bears at mid-1.36

The GBP/USD price is looking to gain some momentum while supporting the 20-period SMA on the 4-hour chart. The price holds a mildly bullish view despite a fall of 50 pips overnight. The reason lies in the volume data that shows a rising volume with rising prices. Any upside attempt will find resistance at 1.3700, while the downside seems supported by the 1.3600 area. Therefore, it is prudent to wait for a decisive breakout on either side to find trading opportunities.