Bank of England Raises Policy Rate by 25 Basis Points to 4%

The Bank of England's 25 basis point rate hike indicates that the global central bank tightening cycle continues. This could reduce risk appetite, leading to capital outflows from emerging markets and pressure on the Turkish lira. In Turkish markets, selling pressure on the BIST and upward movement in bond yields may be seen. In the short term, the deterioration in global risk perception will negatively affect broad market sentiment.

The BoE's 25bp rate hike is a mild positive surprise for GBP; however, the market may have largely priced it in. The price is trading at 1.3469, just below the SMA20 (1.3477) and above the SMA50 (1.3460), with short-term support at 1.3460 and resistance zone at 1.3480-1.3500. RSI at 49 is neutral, MACD is below the signal and momentum is weak; this suggests the upside may be limited. The initial reaction after the news could be upward, but if it fails to sustain above 1.3480, there is a risk of pullback. For 1-3 days, a moderate upward bias, confidence level medium.

The BoE's 25 basis point rate hike is a slight positive surprise for GBP; however, the market may have largely priced it in. EURGBP is at 0.8329 and RSI at 32 is near oversold territory, setting the stage for a short-term rebound. The price is below SMA20 and SMA50, MACD is in negative territory and momentum is weak; therefore, the upside may be limited. In the 1-3 day outlook, a narrow-range recovery is expected rather than mild downward pressure on the pair. Confidence level is low-medium; the news impact is limited and technical indicators are giving mixed signals.