GBP/USD Forex Signal: Forecast As Crude Oil Price Dips

The GBP/USD exchange rate has retreated sharply after peaking at 1.2430 last Friday.  Bullish view

 Bearish view

The GBP/USD exchange rate dropped for three straight days as the price of crude oil dipped and after a relatively hawkish statement by the Bank of England (BoE) governor. The pair retreated to a low of 1.2245, lower than this week’s high of 1.2430. No BoE rate hike aheadThe GBP/USD pair continued falling after Andrew Bailey, the head of the BoE, pushed back against against hopes of a rate cut. In a statement, he argued that the bank was still focused on fighting inflation, which remains at an uncomfortable high.He also noted that the bank needed to be restrictive for a while until inflation moved back to the target of 2.0%. His statement came a day after the bank’s economist hinted that the policy setting committee was open to a rate cut in 2024.The pair also retreated as the price of crude oil dropped. Brent, the global benchmark, dropped below $80 for the first time in weeks. Similarly, the West texas Intermediate (WTI) fell to $75.Falling oil prices will likely be good news for the Federal Reserve and the Fed since it will help to lower inflation. In the United States, the latest data showed that the headline Consumer Price Index (CPI) dropped to 3.6%. In the UK, data by the Office of National Statistics (ONS) revealed that inflation remained above 5%.In a statement on Wednesday, Jerome Powell maintained a balanced tone. He noted that the bank would maintain its data-dependence in determining the next decision. He also hinted that rates will stay higher for longer.Meanwhile, the GBP/USD pair’s decline coincided with lower US stock indices. The Dow Jones index dropped by over 100 points while the Nasdaq 100 index fell by 40 points. These indices had risen for eight straight days. GBP/USD technical analysisThe GBP/USD exchange rate has retreated sharply after peaking at 1.2430 last Friday. It has dropped below the important support at 1.2335, the highest point on October 11th. The pair is trading at the Fibonacci pivot point tool. Also, it has moved above the 50-period and 25-period moving averages.Therefore, the pair will likely continue rising as buyers target the important resistance point at 1.2335. A drop below this week’s low of 1.2250 will point to more downside in the near term. More By This Author:EUR/USD Forex Signal: Falling on Stronger DollarBTC/USD Forex Signal: Bitcoin Forecast As A Bullish Breakout NearsAustralian Central Bank Raises Cash Rate To 4.35%, Australian Dollar Sinks