GBP/USD clattering against the bottom as Thursday's BoE action looms

Sterling tracking close to the bottom ahead of the BoE's Thursday showing, which is expected to bring a stalled rate call.
A quiet schedule for Wednesday has traders sitting on the sidelines waiting for the BoE.

Joshua Gibson FXStreet

The GBP/USD is shifting lower ahead of the European market session, touching into 1.3530 as the Sterling drifts against a US Dollar that is finding itself bid up once more.

BoE to keep rates unchanged - Reuters Poll

The Sterling has fallen against the resurgent US Dollar for three consecutive trading weeks, tumbling almost 6% as the Greenback rebounds across the broader market and the Sterling fumbles against a backdrop steadily-worsening economic data pouring out of the UK. The Bank of England (BoE), which had been highly expected to lift interest rates this week, has had to walk back their hawkish commentary, and many expect the BoE to hold off on a rate increase until August.

GBP/USD at critical juncture ahead of Bank of England

This week's focus has turned to Super Thursday, with the BoE introducing their latest rate call and a speech from the BoE's head, Mark Carney. The high-impact events kick off at 11:00 GMT Thursday. The BoE's Thursday outing gets followed up by CPI figures from the US at 18:00 GMT, and the US' hot streak for economic data has many traders anticipating the Fed will take part in extra rate hikes this year.

GBP/USD analysis: consolidating near multi-month lows, waiting for BOE

GBP/USD levels to watch

As FXStreet's Chief Analyst, Valeria Bednarik, summed up her analysis of the GBP/USD: "Wednesday will offer a data-light calendar from the UK, with attention centered in the upcoming BOE's Super Thursday. The intraday recovery pushed the pair up to its 20 SMA in the 4 hours chart, with the pair still unable to clearly break above the indicator. The Momentum turned higher in neutral territory, while the RSI bounced from oversold readings but remains below its mid-line, limiting the upward potential to a corrective movement, more likely after the pair lost roughly 900 pips. The pair has bottomed at 1.3481 last July, making of the 1.3480 region a strong support for the upcoming sessions, with a break below the level probably initiating a steeper downward move."

Support levels: 1.3480 1.3445 1.3410

Resistance levels: 1.3550 1.3590 1.3625

Author

Joshua Gibson

FXStreet

Joshua joins the FXStreet team as an Economics and Finance double major from Vancouver Island University with twelve years' experience as an independent trader focusing on technical analysis.

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