The GBP/USD is surging this week as the market correctly anticipated a non-event from the FOMC. The GBP/USD moved against general weakness initially, but also extended after the Bank of England's (BoE) monetary policy statement.Mark Carney said the Bank of England is ready to tighten or ease monetary policy in response to inflation developments, dropping its earlier intention to cut the key rate to a new record low.“Monetary policy can respond in either direction to changes to the economic outlook as they unfold to ensure a sustainable return of inflation to the target,” the BOE governor said on Thursday, after he and the rest of the Monetary Policy Committee unanimously voted to leave interest rates and asset purchase-settings unchanged. “We have a neutral bias around policy going forward.” (full article from BloombergMarkets)Essentially, the BoE has taken any further rate cut off the table. Perhaps, instead of calling it hawkish, we should say that the BoE is much less dovish than earlier in the year. Bank of England Statemenet (pdf)I think after a period of a depressed British pound, we have entered a bullish leg of a consolidation/bullish correction stage. GBP/USD daily chart 11/4(click to enlarge)Just the beginning:- I know when we saw the GBP/USD rally this week, it felt like the longest streak of GBP/USD strength in a while. - But when we take a step back, we can see that this week's price action is probably just the start of a longer period of consolidation. - We basically saw a month-long price bottom followed by a bullish breakout.- Now, price is being challenged by a falling speedline just under the 1.25 handle. - Let's see if the market loses steam here this week. The 1H chart should give us clues.- But before going to the 1H chart, the daily chart shows us that if price can steam pass 1.25, GBP/USD would open up the 1.2785-1.28 area, which was the previous consolidation support. GBP/USD 1H Chart (click to enlarge)Momentum slowing, but still bullish:- The 1H chart shows the bullish surge after the BoE statement- We can also see the rally stall a bit under 1.25. But that doesn't mean bears will take over. The technical picture is still bullish. - I think during the 11/4 session, 1.2450 will be a key pivot. - A break below 1.2450 slows down the momentum further and gives the market more reason to fade GBP/USD in the very short-term. - If price does retreat, look for support around 1.2350. IF there is support here, the attack is not over on the 1.25 resistance and the falling resistance (on the daily chart).- A break below 1.2325 would suggest a failure of yesterday's bullish reaction. It would suggest that bears are in charge.