EURUSD and GBPUSD: 0.20% Retreat 

• During the Asian trading session, the euro is in retreat against the US dollar.
• During the Asian trading session, the pound is in retreat against the dollar.
• The Bank of England raised its benchmark rate by half a percentage point and outlined plans to unwind government bonds.

EURUSD chart analysis

During the Asian trading session, the euro is in retreat against the US dollar. Currently, the euro is at 1.02260, representing a 0.20% retreat since the start of trading last night. The pair could go down to the 1.02000 support zone. Additional support at that level is in the MA50 moving average. A break below that level could take us down to the 1.01500 support zone, and if we fail to hold, we move lower to 1.01000. We need a positive consolidation and a return above the 1.02500 level for a bullish option. After that, we could expect a continuation towards the 1.03000 level. At the beginning of the week, we already tried to climb above once, but we didn’t have any success.

GBPUSD chart analysis

During the Asian trading session, the pound is in retreat against the dollar. Since the start of trading last night, the pound has fallen by 0.16%. The moving averages have moved to the bearish side, and we could see a continuation of the pullback today. Our target is the 1.21000 support zone. Yesterday, the pound fell to 1.20650 but quickly recovered and returned above the 1.21000 level. If we see a break below again today, the pair could form a new lower low. In this way, the bearish pressure would increase, and the bearish trend could continue. For a bullish option, we need a new positive consolidation and a return above the 1.22000 level. Potential higher targets are 1.22500 and 1.23000 levels.

Market overview

The Bank of England raised its benchmark rate by half a percentage point and outlined plans to unwind government bonds, citing persistent inflationary pressures and tough labor market conditions despite a looming recession.

The central bank’s monetary policy committee voted 8-1 to raise the bank rate by 50 basis points to 1.75 %, the highest rate since December 2008.

Policymaker Silvana Tenreiro, however, called for a quarter-point increase as she noted that the Bank Rate may already have reached a level consistent with returning inflation to the 2 % target over the medium term. Most members said that a 0.5 % increase was justified at this meeting because these members felt that stronger policy action was warranted.