GBP/USD recovers above 1.2100 after BOE-inspired drop

 


GBP/USD has regained its traction and recovered above 1.2100 after having dropped sharply with the initial reaction to the Bank of England's (BOE) decision to hike its policy rate by 25 basis points. Focus now shifts to US Housing Starts and Jobless Claims data.

The pair was last seen trading near 1.2120, where the 20-period SMA on the four-hour chart and the Fibonacci 23.6% retracement of the latest downtrend align. In case this support fails, additional losses toward 1.2050 (static level) and 1.2000 (psychological level) could be witnessed. Meanwhile, the Relates Strength Index (RSI) indicator on the same chart stays below 50 despite Wednesday's rebound, suggesting that buyers remain hesitant to commit additional gains in the near term.

On the upside, stiff resistance is located at 1.2200 (Fibonacci 38.2% retracement). A four-hour close above that level could be seen as a bullish development and open the door for an extended rebound toward 12300 (Fibonacci 50% retracement) and 1.2350 (50-period SMA).

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