GBPUSD Lower Ahead of BOE

Hawkish Risks Into BOEThe main event for traders today will be the August Bank of England meeting. GBP is trading lower ahead of the meeting, despite the BOE being widely expected to hike rates by a further .25%. Indeed, over the last week many players have cited their view that the bank might hike by a larger .5%, creating plenty of hawkish risk into the event. While inflation was seen falling sharply last month, CPI is still well above the bank’s target, creating the need for further action here.Forecasts & QT On WatchAlong with the rate decision today, traders will also receive the bank’s latest set of forecasts as well as an update on QT. With the bank’s tightening program currently running at £80 billion per year, we might see some adjustment around this figure which should feed into GBP volatility. The big issue for GBP here is the negative impact on the UK growth outlook linked to further tightening. While the bank might refrain from a larger hike today it is certainly likely to leave the door open to further tightening, which should keep GBP pressured on recession concerns, particularly while USD is seeing firm safe-haven demand.Technical ViewsGBPUSDThe reversal lower in GBPUSD has seen the market breaking down through the rising trend line. Price is now testing support at the 1.2659 level. With momentum studies bearish, a break lower here will open the way for a move down to 1.2437 next while, to the topside, 1.2992 remains the key resistance to note.