GBP/USD plumbed a 37-year low of 1.1351 last week. Downside bias stays intact ahead of the Bank of England (BoE) meeting, economists at Société Générale report.

Persistence in downtrend

“GBP/USD has breached the low of 2020 and further pain could lie in store this week if the BoE decides to start selling gilts.”

“Investors will brace for the so-called fiscal event on Friday. The fiscal loosening will be offset by monetary tightening by the BoE and is unlikely to bring much relief to the pound as investors fret over the deterioration of public finances and rising bond yields.”

“Signals of rebound are still not visible; next projections are at 1.1270/1.1210 and 1.0950.”

“Daily Kijun line at 1.1740/1.1760 caps upside.”