GBP/USD was stuck near its latest trend low on Monday after giving up earlier gains, trading in a 1.2410-1.2371 range, and it could be vulnerable to a slide toward May and March lows if rises of a less-hawkish BoE risks materialize.

Sterling's once lofty 2023 gains have been whittled down to 2.4% as traders reduce the net spec GBP longs from 15-year highs in late-July, though IMM positioning data indicates at a much lower pace recently 1096742NNET.

Extreme long GBP positioning has fallen by approximately 18,000 contracts since late July as BoE rate expectations moved lower on expectations that UK inflation would diminish at a quicker pace, with the pound falling near 6% since its July 14 2023 peak at 1.3144.

This week's Fed and BoE MPC meetings may be significant for GBP bulls.
Though futures markets are pricing in a Fed hold, and an 80% chance for a BoE 25bp hike a dovish tone by the MPC could pushing GBP/USD below the June 5 low at 1.2370, putting the May 25 low at 1.2308 and March 2023 lows by 1.1780 as traders unwind longs.

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