The GBPUSD pair ripped higher on hawkish comments from Carney yesterday and like a similar time a couple of weeks back, the BOE has once again managed to save the pound from falling further. The same thing happened a couple of weeks back, when the pound was in a free fall due to the results of the UK elections and the BOE helped the pound to recover when 3 of its members voted for a rate hike when none was expected. Yesterday again, the pound was struggling but Carney saved the day.

Its the Turn of the Pound to Rip Higher

We had mentioned in our forecast yesterday that the pound would be looking towards Carney to prop it up as it was unable to make much progress despite the all round weakness of the dollar. While euro was making rapid strides against the dollar, the pound lagged behind and continued to look weak and it looked as though it might suffer much worse if and when the dollar strength returned.

But Carney had his speech up his sleeve and in his speech, he mentioned that the time was nearing to taper the stimulus and focus on growth. This was clearly a hawkish speech and it is probably for the first time that Carney had spoken about tapering. This helped the GBPUSD to push higher from the lows in the 1.2800 region and the pair broke through 1.29 and trades comfortably above 1.2950 as of this writing and continues to look strong. It is likely that it was helped along by some month end flows as well but it looks to be set to continue its upwards journey though the key round figure of 1.3000 looms ahead. The region between 1.3000 and 1.3030 is likely to see a lot of selling.

Looking ahead to the rest of the day, we do not have any major news from the UK but we have the GDP data from the US and the market would be hoping that this would be positive for the dollar as the Fed had said that the weak data over the last few weeks was only a blip and that the data was likely to get better in the coming weeks.If the data is not strong, the dollar is likely to suffer even further and we should then see the GBPUSD pair make a serious attempt at break the highs in the 1.3030 region.

This article was originally posted on FX Empire

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