GBPUSD under pressure after BoE survey 📌

A Bank of England survey of market participants indicated yields on 10-year gilts at 3.5% at the end of June 2023 and 3% at the end of December 2023:

• UK CPI inflation is projected to reach 8.3% in six months, 5.5% in December 2023, 3% in December 2024 and 2% in December 2025. It will take almost three years to bring it to target;
• Survey estimates £76 billion of winding down the QE program between November 2022 and September 2023, and £80 billion between September 2023 and September 2024;
• The survey gave a 29.8% chance of a bank rate cut over the next year. It indicates that the bank rate will peak in March 2023. According to the Bank of England's survey of market participants, the median projection for the peak bank rate is 4.25%.
• Respondents in the survey expect a gradual, slight strengthening of the British pound against the euro, despite an increasingly hawkish ECB. According to survey responses, the EURGBP exchange rate will reach 0.88 in December 2023 with a 75% probability against 0.872 currently. Far fewer respondents favored a weakening of the pound against the European currency.

GBPUSD has fallen below the 100-session moving average (black band) from where it is possible that bears will want to test the reversal of the uptrend after several months of solid gains on the 'cable'. The main support runs around 1.19, where the 200-session average (red band) is located. 

Source: xStation5