The pound has remained on a slippery slope. Especially in the crosses, GBP could strengthen as the market is sitting too much on the bearish side ahead of next week’s Bank of England (BoE) meeting.

Too early to write off sterling

“We think markets may be positioning a bit too much on the bearish side of sterling ahead of next week’s BoE meeting, and the drop is starting to look stretched, especially in the crosses.” 

“We think a return to the 0.83-0.84 range in EUR/GBP may be on the cards over the coming weeks unless the BoE sends strong bearish signals.”

“GBP/USD could remain vulnerable as the dollar retains some momentum. The 1.25 support could prove a rather strong one, but further deterioration of the external environment could see that level being heavily tested before the end of the week.”