GBP/USD: Sellers take control in London, BoE up next

GBP/USD has fallen sharply at the London open, printing its lowest for the day near 1.44 handle after successive topside failures through 1.4450 in Asia, which saw the risk sentiment improved a touch ahead of the BoE inflation report.

BoE inflation report holds key

According to Rabobank Research Team: "Today's release of the May Inflation Report gives the BoE the opportunity to give recent weak economic data releases some more context. The Bank’s current projections for GDP growth are well above those in the market. Given the recent spate of soft data releases, there seems to be a strong chance that the BoE may revise down its projections for economic activity in its May Inflation Report. The likelihood of changes to the inflation outlook, however, are less straightforward."

GBP/USD technicals

Technically, Haresh Menghani, Analyst at FXStreet, notes that "the pair seems well-staged for short-term technical break-out of a descending trend-channel, with a potential of follow through buying interest with the impending BoE decision."

Should GBP/USD recover 1.4450, Haresh sees immediate resistance at 1.4490-1.4500 handle, ahead of 1.4535-40 horizontal resistance and 1.4590-1.4600, the Analyst notes. On the downside, Haresh views 1.4400 handle as key support, adding that "below the 100-day SMA support is 1.4360 and ahead towards testing its next major support near 1.4300 confluence region, comprising of the descending trend-channel support and 61.8% Fibonacci retracement level."