GBP/USD is extending a bearish reversal towards levels last seen in early July as markets pare back expectations for Bank of England tightening. The data calendar is light ahead of Thursday’s BoE meeting, which will include an updated forecast. Short-term rate markets have reduced the degree of tightening priced in for coming months, weakening support that had come via rate spreads.
Bank of England Meeting and Market Expectations
September meeting pricing has dropped from 20bpts to 13bpts, while cumulative tightening priced by December has fallen by about 12bpts to 37bpts. Sterling is down a fractional 0.1% against the dollar.
Technical Outlook and Key Levels
Technical conditions remain bearish: the RSI is sliding further into negative territory and is threatening a move below 40, with the pair trading within a range spanning the mid-1.31s to the mid-1.35s; near-term support is seen at 1.3250 and resistance at 1.3350.
