GBP/USD Declines as Bearish Bias Persists Below 100-Day Moving Average

The GBP/USD pair has been trending downwards in early European trading hours on Thursday, reaching levels near 1.3250 due to a bearish bias that persists below the 100-day moving average.

This decline is attributed to the widening monetary policy divergence between the Bank of England and the US Federal Reserve, with the BoE policymakers indicating a possible single rate hike to tame inflation without fueling unwarranted market speculation of further increases.

The UK's growth backdrop has improved, according to MUFG analysts, who have raised their forecast for Q3 growth to 0.4% from 0.1%. This stronger growth is expected to encourage the BoE to tighten policy soon if higher energy prices persist, potentially leading to a potential reverse-Brexit trade for the pound in the future.

The GBP/USD pair's technical analysis suggests that it remains bearish below the 100-day SMA, with the Relative Strength Index (RSI) hovering just above oversold territory. The immediate support level is located at 1.3202, followed by the Bollinger lower band near 1.3140.