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GBP/USD Continues Higher After the BoE Inflation Report

The GBP/USD was testing a price bottom made last week. It was waiting for the BoE inflation report. As we can see in the 4H chart, the pair surged after the event. This confirms a price bottom and has at least a short-term bullish outlook. 

GBP/USD 4H Chart 2/12

(click to enlarge)

The 4H chart shows that GBP/USD has been resilient even before the report, withstanding USD-pushes from the hawkish FOMC statement and the strong US jobs report. 

Now cable is breaking above last week's high of 1.5350. So what was in the BoE inflation report? 

Well, the MPC actually improved growth outlook, saying that the low oil price environment should spur recovery. However, inflation is below 2% and heading towards 1.0%, which leaves the door open for a rate cut.

Apparently, the growth forecast won out, with help from short-term bullish momentum.

When we look at the daily chart, we can see that today's rally broke above the falling trendline from July. This is a key break and make GBP/USD neutral if not bullish. I would lean towards the neutral assessment, because inflation does indeed cause rate cut considerations. Perhaps, the 1.5486-1.55 level, or the 1.56-1.5620 area should be the limits to the current bullish outlook. 

GBP/USD Daily Chart 2/12
(click to enlarge)