The Bank of England (BoE) voted 9-0 to keep rates at 0.5% during this month's interest rate decision, which dragged down the GBP/USD in today's trading. BoE Governor Mervyn King, Paul Fisher, and David Miles also voted to increase stimulus to £400 billion, but lost in a 6-3 vote, which meant it would remain at £375 billion.
With today's announcement from the BoE, the GBP/USD pair fell to around the 1.561 level. Initial resistance for the pair is seen at 1.5684, followed by 1.5723. Meanwhile, initial support is at 1.5523, followed by 1.5484.
It was a different story with the EUR/GBP, however, which rose after the BoE's announcement. The pair is currently trading at 0.8578 level, making a sharp upward spike from 0.8555. Initial resistance for the pair is at 0.8618, followed by 0.8639. On the other hand, initial support is at 0.8530, followed by 0.8508.
From the temporary shift in focus from the BoE's announcement, it now returns to the US as the market awaits the FOMC Economic Projections, the Fed's interest rate decision and the press conference that would follow. But first, let us have a look at the EUR and the AUD versus the USD.
After spiking up the 1.341 mark, the EUR/USD pair has somehow hovered between the 1.339 and 1.340 levels over the past few hours. Initial resistance for the pair is at 1.3449, followed by 1.3483. Meanwhile, 1.3359 is the initial support, followed by 1.3325.
As for the AUD/USD pair, it has recovered slightly in the past eight hours from 0.9440 to the current 0.9504 level. Initial support for the pair is 0.9531, followed by 0.9555. Meanwhile, initial support is at 0.9394, followed by 0.9371.
Analysts continue to be torn as to whether Bernanke and company would hint at QE tapering. Chairman Bernanke previously said that a tapering might happen in the next few meetings. Whether or not that would happen in today's meeting remains to be seen. Expect a lot of volatility in the market in the next few hours.
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