GBP/USD surges above 1.34 despite BOE rate cut decision

GBP/USD has jumped significantly to reclaim the 1.3400 handle following the Bank of England's latest monetary policy decision, defying expectations with its resilient performance despite the rate cut. The pound's strength suggests markets had already priced in the BOE's dovish move, with traders focusing instead on the central bank's forward guidance and economic projections. The pair's ability to maintain gains above this key psychological level indicates underlying sterling support, potentially driven by relative dollar weakness and improved UK economic sentiment. Technical analysis shows immediate resistance at 1.3450, while the reclaimed 1.3400 level now acts as crucial near-term support. The unexpected pound strength following a typically bearish catalyst demonstrates complex market dynamics, with traders weighing the BOE's policy stance against broader dollar weakness and UK economic resilience. Short-term outlook remains constructive above 1.3400, though sustained moves higher will require continued fundamental support.