GBP/USD meets the 100-hr SMA and looks in at 21-hr SMA for support

• GBP/USD: no chances of a BoE rate hike on Thursday leaves 1.35 handle vulnerable.
• GBP/USD bears supply caps territory on 1.36 handle.

GBP/USD has been struggling with offers in at 1.36 territories sending the pair back to the hourly 100 SMA at 1.3550, a pivotal point where the 21-hr SMA converges and offers firm support. The sentiment is poor for the pound ahead of the BoE tomorrow and currently, GBP/USD is trading at 1.3554, up 0.05% on the day, having posted a daily high at 1.3609 and low at 1.3499.

GBP/USD has faced hefty supply since 16th April from 1.4376 with bears accumulating a potential of 892 straight pips to the lows of 1.3484. The UK data has been disappointing time and time again in the run-up to the BoE tomorrow. 

BoE coming up, what to expect

Previously, it was a no-brainer that the MPC would be hiking as soon as this month, but the poor data of late and with Brexit being in a state of disarray, this leaves little room for a rate hike tomorrow.

Analysts at ING Bank argue:

"We think Governor Carney's reiteration that another rate hike remains likely this year should put a backstop to any further GBP positioning adjustment. Instead, the much cleaner positioning means that GBP/USD is more vulnerable to a sharper rebound in the event of a hawkish surprise (ie, a 6-3 vote MPC split)."

 

GBP/USD levels

Analysts at Scotiabank explained that cable remains well-supported above 1.35, with a third test of the figure area this week rebuffed again overnight:  "Short-term charts reflect good resistance at 1.3585/90 and trend oscillators are still positioned adversely for the GBP across short, medium and longer term oscillators. This situation really favours fading GBP gains unless spot can reach a 1.36 handle today."