Sterling continued to tread cautiously around 1.30, trading between its falling 10-DMA at 1.3052 and recent lows near 1.30, with upcoming BoE commentary and U.S. election betting likely to drive cable in the near term.
Dollar-friendly Trump trades have been on the rise amid poll gains by former President Donald Trump.
Trump's tariff increases and lower tax policies are expected to keep U.S. rates high, which would boost the dollar bid even against relatively higher yielding economies like the UK.
Sterling watchers await comments this week by a slew of BoE members, including recently dovish Governor Andrew Bailey on Tuesday, and the more hawkish Catherine Mann on Thursday, for clues at the path of near-term BoE policy.
Given the recent declines in UK inflation the calculus for sterling traders lies within the relative paths of expected Fed and BoE rate policy.
The recent dialing back of more dovish Fed expectations, paired with dovish Bailey comments has weighed considerably on GBP/USD.
Should the chorus of UK comments and data hint at a faster BoE cut path GBP/USD longs are likely to continue to unwind, putting Thursday's 1.2975 low and the daily cloud base at 1.2967 in view.
If those levels are breached, the 200-DMA at 1.2798 should come quickly into focus.
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