Cable surged over 0.5% after BoE left rates unchanged at 0.25%, as expected, but significant point was vote of one of policymakers for rate hike.
Markets anticipated that such step could be followed by other MPC members next time that lent strong support to the pound.
With inflation in UK being on strong footing and other economic parameters showing solid numbers, the only dissonant tone came from wage growth, which fell below expectations in Feb.
However, positive sentiment is building, as BoE expects Britain’s economy to grow by relatively strong 2.0% this year that may push BoE towards more aggressive approach in next meeting.
From technical point of view, fresh bullish acceleration that extended in the second day, broke above the upper pivot at 1.2343 (daily Kijun-sen) and sidelined selling-upticks scenario that was in play on prevailing bearish tone.
After our upper trigger was taken out, near-term focus turned higher. Fresh rally is approaching next pivot, daily Ichimoku cloud (spanned between 1.2379 and 1.2435). Sustained break above the cloud would be another strong bullish signal.
Former barrier and pivot at 1.2300 now acts as strong support (broken top of thick 4-hr cloud) which is expected to hold extended corrective downticks.
Res: 1.2379; 1.2392; 1.2435; 1.2459
Sup: 1.2326; 1.2300; 1.2239; 1.2200
