• GBP/USD trims a part of its intraday gains after the BoE delivers a 50 bps rate hike on Thursday.
• The USD remains stuck below a two-decade high but continues to extend some support.
• Aggressive Fed rate hike bets act as a tailwind for the USD and should cap the upside for the pair.

The GBP/USD pair meets with fresh supply and trims a part of its strong intraday gains after the Bank of England announced its policy decision. Spot prices retreat back below the 1.1300 mark, though remain comfortably above the lowest level since 1985 touched earlier this Thursday. 

As was widely expected, the UK central bank raised interest rates by 50 bps - the seventh hike since December - at the end of the September policy meeting. This, however, might have disappointed some investors anticipating a more aggressive rate increase and turned out to be a key factor acting as a headwind for the British pound.

The US dollar, on the other hand, is seen consolidating its sharp intraday retracement slide from a new two-decade high and continues to lend some support to the GBP/USD pair. The sharp USD downfall on Thursday follows the news that the Japanese government has intervened in the forex market, which triggers a massive rally in the Japanese yen.

From a technical perspective the pair has today recovered back up to the underside of an important trendline and the base of a long-term falling channel at 1.1315, drawn by connecting the May, June and July 2022 lows. This was breached by the previous day's candle on USD strength following the Fed meeting, however, today's recovery on the back of the BoE meeting announcement has seen a throwback move unfold to the underside of the channel. The prior day's close is a bearish signal and more downside is quite possible. The throwback may provide the perfect low risk entry for short sell orders as price kisses it goodbye for the last time, although a more cautious entry point would be the day's lows at 1.1210. A possible downside target at 1.1100 is the 61.8% Fibonacci extension of the move prior to breakout. 

That said, a more hawkish stance adopted by the Federal Reserve should continue to lend some support to the greenback. Apart from this, a bleak outlook for the UK economy might further contribute to keeping a lid on any meaningful upside for the GBP/USD pair, warranting some caution before positioning for any meaningful recovery move in the near term.

Technical levels to watch