BoE's first rate hike in 3 years: Policy rate rises to 4%

The BoE's decision to raise interest rates for the first time in three years, lifting the policy rate to 4%, could suppress global risk appetite in the short term and lead to capital outflows from emerging markets. In countries with high external financing needs such as Turkey, additional depreciation pressure on the lira and upward movement in bond yields may be seen. However, if the decision is largely priced in and the Fed is not more hawkish, the impact may remain limited. Overall, a cautious selling tendency may come to the fore in global markets.

The BoE's decision to raise the policy rate to 4%, the first hike in three years, is a fundamentally supportive development for GBP. However, the price is already at 1.3471 and the 24-hour change is flat (-0.04%); the market may have largely priced in this move. RSI at 49.5 is in neutral territory, MACD is below the signal line (0.00013 vs 0.00054), and short-term momentum is weak. The price is slightly below SMA20 but above SMA50; this mixed picture suggests the news could produce a limited and choppy upward reaction. A mildly positive but low-confidence trend is expected over the 1-3 day outlook.

The BoE's first rate hike in three years, raising the policy rate to 4%, is a fundamental positive catalyst for GBP; however, the market may have largely priced this in. EURGBP is trading at 0.83285 and has fallen 0.09% in 24 hours; RSI14 at 32.4 is near oversold territory, which could set the stage for a short-term rebound. MACD is in negative territory and below the signal line, and price trading below SMA20 and SMA50 confirms weak momentum. Although the rate hike news supports GBP, downward pressure may persist in the EURGBP pair; therefore, I assess the direction as 'up' but keep confidence at medium. In the short term, 0.8330-0.8340 should be watched as resistance and 0.8315 as support.

The BoE's first rate hike in three years, raising the policy rate to 4%, is a fundamentally positive signal for GBP, and sterling is expected to be supported against the yen in the short term. However, the price is already above the sma20 and sma50, the RSI at 56 is far from overbought territory, and the MACD is slightly below its signal line; meaning a significant part of the news may already be priced in. With the 24-hour change nearly flat (%-0.02), the market is currently indecisive. Although there is a mild upward bias in the short term, selling pressure may be seen in the 213.20-213.40 resistance zone. If the rate hike comes with 'dovish' comments, the reaction may remain limited.