GBP/USD continued its descent in early NorAM trading, sliding to a new 5-week low at 1.2674 as recent sterling longs exit amid mounting global growth concerns.
This may exacerbate BoE cut expectations adding downward pressure on the pair as key support at the daily cloud top and 100-DMA are tested.

Sterling has been on a one-way ride lower since putting in its 2024 high at 1.3044 on July 17, that high printed as the Fed shifted to a more dovish stance ahead of its July 31 hold.

Since the high, dovish BoE tones have risen with the move lower picking up speed after the BoE cut on August 1.

While the BoE continues to say the right things cautioning markets on rate speculation and touting data dependence, the BoE's Bailey had commented recently that it's reasonable that BoE forecasts are based on the current market curve, which is indicating lower rates 0#SON3:.

Today's dip below the daily cloud top at 1.2702 and test of 100-DMA support at 1.2684 suggests the recent record sterling long position, of 142,183 contracts put in as of July 23, is continuing to unravel amid more-dovish BoE expectations, and a test of 200-DMA support by 1.2655 and the daily cloud base at 1.2579 may be in the cards.

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