GBP/USD Tumbles Near July Lows as Markets Await BoE Decision

The British Pound (GBP) remains under pressure against the US Dollar (USD), trading near July lows as markets await the Bank of England's (BoE) interest rate decision. The GBP/USD pair currently hovers around the 1.3380-1.3375 region, a level last seen on July 30.

Analysts at MUFG/BTMU expect the BoE to deliver a 'fairly hawkish hold' tomorrow, using the decision to signal that a rate hike in November is possible if energy pricing remains elevated. The market is pricing in an 80% chance of a hike in November, with the first of around four expected over the next year.

The US Dollar, on the other hand, is consolidating near its highest level since late July and offers some support to the currency pair. However, the hawkish stance of the US Federal Reserve (Fed) and Middle East jitters favor USD bulls, keeping a lid on any meaningful recovery for the GBP/USD pair.

From a technical perspective, the overnight breakdown below the 200-day Simple Moving Average (SMA) validates the negative outlook, warranting caution for aggressive bullish traders. The path of least resistance remains to the downside, with any recovery attempts more likely to be sold into.