Pound Extends Bearish Reversal Ahead of Bank of England Decision

The British pound has extended its bearish reversal against major currencies like the US dollar ahead of the Bank of England's upcoming monetary policy decision, according to Scotiabank analysts.

Scotiabank notes that the recent price action in GBP/USD confirms a bearish reversal pattern that began late last week. The pair has broken below key short-term support levels, suggesting further downside pressure in the near term.

The analysts point to technical resistance near the 1.2700 area, with immediate support now seen around 1.2600. This bearish sentiment is driven by growing expectations that the BoE may signal a more accommodative stance at its next meeting, as the UK economy shows signs of slowing.

The market's focus is squarely on the tone of the BoE's accompanying statement and the vote split among Monetary Policy Committee (MPC) members. A dovish tilt or any indication that rate cuts are being discussed could accelerate the pound's decline.