GBP/USD bounces off lows, back near 1.39 handle ahead of BOE

   •  Repositioning trade triggers some volatile moves.
   •  All eyes remain focused on the BOE announcement. 

The GBP/USD pair quickly reversed an intraday dip to mid-1.3800s and is currently placed in neutral territory ahead of the BOE announcement.

A fresh wave of US Dollar buying interest prompted some fresh selling during the early European session on Thursday but once again managed to find some buying interest near the 1.3845-35 region.

The latest leg of recovery move of around 40-50 pips from session lows lacked any fresh catalyst and could be solely attributed to some repositioning trade ahead of the very important BOE's Super Thursday.

Heading into the key event risk, traders seemed reluctant to place any aggressive bets and could also be one of the factors behind the pair’s good two-way/volatile move over the past couple of hours. 

The BOE decision, along with the release of minutes and the Quarterly Inflation Report (QIR), and followed by the BOE Governor Mark Carney's post-meeting press conference should help investors determine the next leg of directional move. 

Technical outlook

Mario Blascak, European Chief Analyst at FXStreet writes, “both Slow Stochastics and MACD have still room to go on the upside, the key risk event is the tone of the Inflation Report that is set to give direction for GBP/USD. Breaking the trendline resistance on the upside would still require GBP/USD to return decisively above $1.4050 to confirm reversal while break on the downside, especially below $1.3830 should indicate further downside.”