British Pound, GBP, GBP/USD, GBP/JPY Talking Points:
It was less than a month ago that the beleaguered British Pound was limping[1] into yet another rate decision from the Bank of England. A month prior, in early-November, there were even some expectations for a rate hike[2] and GBP[3]/USD[4] was bristling with bullish potential, threatening to pose a topside breach of a bull flag formation[5] that had been brewing for five months prior.
But when the bank didn’t hike at the Super Thursday rate decision[6], GBP fell out of bed and didn’t start to find its footing until a month later, right around another batch of rate decisions between both the BoE and the FOMC[7]. After threatening to break above the bull flag in early-November, by mid-December GBP/USD was nearing invalidation of that formation, with support holding at a very key spot on the chart.
This was also around the time that some major support became to show up in both GBP/USD and GBP/JPY[8]. The area around the 1.3167 price is confluent, as this is the 38.2% Fibonacci retracement of the 2020-2021 major move; and when this price traded on December 8th, it was confluent with the bottom side of that flag formation.
And then the Bank of England hiked rates in December, helping to bring some lift into the GBP, and that theme continued through the holidays with the British Pound showing as one of the strongest currencies in the world as markets began to build expectations for more hikes in the New Year. The pair is now trading above the 1.3500 psychological level[9] and there appears to be the potential for brighter
