Positioning and valuations are a hindrance to further upside. 

Even a 50 bps hike from the Bank of England (BoE) on Thursday may not provide lasting support for the currency, particularly given likely downward revisions to inflation projections and a split vote. There is a sizeable chance that the BoE raises rates by only 25 bps, which will likely see the GBP weaken immediately. 

We look for GBP/USD to weaken and challenge the support at 1.26 over the coming weeks, while any moves above 1.30 are likely to be brief.