GBP/USD Price Analysis: Flirts with 1-month old trend-line support ahead of BoE

• GBP/USD turns lower for the third consecutive session on Thursday.
• The downside remains limited ahead of the key BoE policy decision.
• The set-up warrants some caution before placing any directional bets.

The GBP/USD pair failed to capitalize on its early uptick to the 1.2565 region, rather met with some fresh supply and drifted into the negative territory for the third consecutive session.

The pair refreshed daily tops during the early European session, albeit has managed to hold its neck above the key 1.2500 psychological mark. The mentioned level coincides with a one-month-old ascending trend-line and should act as a key pivotal point for short-term traders.

Meanwhile, technical indicators on hourly charts have been gaining negative momentum and support prospects for an eventual bearish breakdown. However, oscillators on the daily chart are yet to confirm the negative outlook and warrant some caution for bearish traders.

Investors are likely to refrain from placing any aggressive bets ahead of the highly-anticipated BoE monetary policy update. This makes it prudent to wait for a convincing breakthrough the mentioned trend-line support before positioning for any further depreciating move.

A convincing breakthrough now seems to accelerate the fall back towards weekly lows, around the 1.2455 region. Some follow-through selling might turn the pair vulnerable to weaken farther below the 1.2400 mark and aim towards testing the next major support near mid-1.2300s.

On the flip side, the daily swing high, around the 1.2565 region now seems to act as immediate resistance and is followed by the 1.2600 mark. Above the said resistance levels, the pair might head back towards challenging the very important 200-day SMA, around the 1.2680 region.

GBP/USD 4-hourly chart

Technical levels to watch