The bar for a bounce in GBP/USD is higher than it was six months ago – SocGen

GBP/USD saw the first daily close below the 200-Day Moving Average (DMA) last week since March. Economists at Société Générale analyze the pair’s outlook ahead of the BoE meeting on Thursday.

Possibility of a final 25 bps increase by the BoE and a pause could keep the GBP out of favour vs. the USD

The possibility of a final 25 bps increase by the BoE and a pause could, in theory, keep the Pound out of favour vs. the USD. 

The last breach below the 200-DMA in March proved an inflection point rather than a sell signal but this time the UK labour market is loosening and a sharp drop in employment means the bar for a bounce in GBP/USD is higher than it was six months ago.