GBP/USD is on course to challenge the 1.36 level – Scotiabank

Cable is on a four-day losing streak – its longest since late-Sep – ahead of Thursday’s Bank of England (BoE) decision. Economists at Scotiabank expect GBP/USD to suffer minor downward drift toward 1.36 owing to the chance that the bank holds.

GBP to slip as markets consider BoE tightening risks

“We think the odds that the BoE holds have risen. A rate hike this year still seems likely but the BoE may want to rein in expectations for 2022 – and hiking at the same time makes this a complicated message.”

“GBP/USD looks on track for a test of 1.36 that should stand as firm support and see it bought on dips below the figure until ~1.3585. A break below the mid-figure zone does leave the GBP at a clear risk of re-testing the low 1.34s where it traded in late-September.”

“Resistance is ~1.3670 and then the 1.37 zone with the 50-day MA at 1.3712.”