On Wednesday, the Fed raised its benchmark overnight interest rate by half a percentage point, the Sterling went up 187 points from 1.2451 to the 1.2638 level. But the British pound fell on Thursday against a rebounding dollar before a key policy announcement from the Bank of England and after the U.S. Federal Reserve delivered its biggest rate hike in 22 years.
BoE policymakers are expected to raise interest rates for the fourth consecutive meeting, the first such run since 1997, taking the Bank Rate to 1% from 0.75% now.
The failed test up today around the 1.2368 resistance continues a turn back to short term bear trending action. The British pound is trading at its lows poised for a bear day and close under 1.2520 implies a bear wave to 1.2411 (Double Bottom). Any corrective congestion capped under 1.2368 should bear flag a setup for selloffs. A close over 1.2685 is needed to reject the downturn.