The stronger dollar today is heaping pressure on GBP/USD as the pair moves lower to run into a test of its key daily moving averages once again. Right now, the pair is pushing against its 100-day moving average (red line) at 1.1974 with its 200-day moving average (blue line) not far away at 1.1916.
Those have been key levels in limiting the recent downside in cable since last month, before potentially revisiting the lows around 1.1840 to 1.1900 region next.
After BOE governor Bailey's remarks yesterday here, it is hard to be optimistic about the pound whatsoever and with US data continuing to show that inflation is holding up, that is enough to pump up bond yields and in turn, the dollar as well.
For now, the key technical levels above will be the big one to watch today and if they give way, it just adds to the potential for a downside breakout in GBP/USD after about three months of consolidation.