GBP/USD corrects post-BoE losses, still below 1.29

After slipping to a fresh five-day low at 1.2850 following the Bank of England Governor Carney's comments, the GBP/USD pair started to retrace its losses in the NA session as the US Dollar Index failed to extend its gains. At the moment, the pair is trading at 1.2880, down 0.45% on the day.

The Bank of England decided to keep the policy rate and the amount of QE unchanged at 0.25% and £435B respectively. Following the decision, Governor Mark Carney said that the current monetary policy was appropriate and the weak GBP was the main reason behind the rising inflation. Investors were expecting the BoE to adopt a more hawkish tone after the latest inflation numbers and were disappointed, triggering a GBP sell-off. However, despite today's drop, the pair remains in its two-week-old range.

• BoE’s Carney: Monetary stimulus is appropriate, not excessive

On the other hand, the US Dollar Index struggled to build on its gains after spiking to 99.77 on Carney comments and positive macro data from the U.S. As of writing, the index was flat on the day at 99.50. For the remainder of the day, the pair could continue to move consolidate its losses as the calendar won't be offering any data.

• US: Weekly initial claims was 236,000, a decrease of 2,000 from the previous week

Technical outlook

The pair could face the first resistance at 1.2900 (psychological level), ahead of 1.2965 (Apr. 28 high) and 1.3000 (psychological level). To the downside, 1.2850 (daily low) could be seen as the initial support before 1.2760 (Apr. 21 low) and 1.2700 (psychological level).