GBPUSD has fallen further in early London session on Tuesday, as the market waits for Bank of England (BoE) Governor Andrew Bailey’s testimony before the UK parliament. The cable was down –0.07%, going for 1.2588 at 08.50 am UTC, and extending its Monday losses. There was no macroeconomic data released from the UK on Monday, while markets in the US remained closed for the Presidents’ Birthday Holiday. Nonetheless, the pound failed to hold on to Friday’s marginal gains, underlining the bearish sentiment around the GBPUSD pair.
BoE Governor, Andrew Bailey is scheduled to testify before the UK parliament’s Treasury Select Committee. While the specifics of the testimony are not public knowledge, Bailey is expected to provide insights into the BoE’s next course of action in light of UK’s economic data that has been sending mixed signals.
Besides the Governor, two BoE Monetary Policy Committee (MPC) members are scheduled to speak during the London Session. Ben Broadbent and Swati Dhingra will speak around the same time the Bailey will be in parliament, and their statements could strengthen the momentum around the GBPUSD pair.
As things stand, more macroeconomic action will be happening around the pound than the dollar, at least until on Wednesday. The Parliamentary session is especially expected to be inquisitive, which could reveal more on the BoE’s next monetary policy decision. Therefore, GBPUSD’s swings either to the upside or downside will likely hinge on the MPC members’ speeches. However, new impetus could come in on Wednesday when the FOMC minutes come out.
GBPUSD is under pressure, and the RSI indicator seems to favour downside action. Furthermore, we are likely to see the pair go further down if it fails to break the first upside barrier at 1.2630 from the 1.2610 pivot. This would likely see the sellers push GBPUSD below the first support at 1.2570 to find the second support at 1.2550. Alternatively, a break past the 1.2630 resistance could see gains to test the next resistance at 1.2645.