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GBP/USD is finding it hard to hold onto the 1.31 handle and is flirting with this line. At current levels, cable is at the lower end of the wide range of 1.3030 to 1.3320 that characterized it recently.

1.3080 serves as a line of support, the last barrier before the bottom of the ranger. On the topside, 1.3180, 1.3225 and 1.3270 are notable. All in all, attempts to move to the upside seem to fail.

Why is Sterling weak? The mean reason is the dovish hike from the BOE. Nearly a week after that move, the pair finds it hard to recover. The Bank of England seemed very reluctant to raise interest rates and clearly signaled it is a one-off. When will the next move come? The BOE sees only two hikes within the next three years.

The most recent pressure on the British currency comes from the issues surrounding the minority government. Michael Fallon was forced to resign from his post as Defence Minister due to allegations of sexual misconduct. Another minister, Priti Patel, is under pressure to quit over unauthorized meetings with Israeli officials.

The government is already suffering from infighting between hard and soft Brexiteers. And, those Brexit negotiations are stuck.

It is also important to note that the US dollar has been suffering from political infighting in America as well: Republicans are odds with each other over details of the tax plan. So while the greenback is sliding against the euro and the yen, it is rising against the pound.

More:  GBP/USD to 1.25 during the next 6 months – BNPP

This is clearly bearish for the pound. Here is how it looks on the chart: