GBP/USD remains under pressure, target 100 dma for a test of 1.2400 level?

Currently, GBP/USD is trading at 1.2494, down -0.48% on the day, having posted a daily high at 1.2603 and low at 1.2491.

GBP/USD remains on the back foot after breaking below the 1.25 handle. The pound had been ripe for a correction after failing multiple times on the 1.26 handle, capped at 1.2680. The 100 dma down at 1.2400 is a key area of support, but Brexit concerns have surfaced once again and despite dollar weakness else where, the euro and pound remain under pressure.

BoE Quarterly Inflation report matters this week - Scotiabank

For the week ahead, the Bank of England meets. "Although some talk about the central bank's neutral stance, it is still engaged in buying Gilts and corporate bonds," analysts at Brown Brothers Harriman (BBH) explained, adding, "It has been fairly successful in purchasing corporate bonds and may achieve its objective earlier than had been anticipated. There could be some update of operational issues.

BoE outlook

The analysts at BBH noted that it is true that the risk of a BOE rate cut has slackened considerably since last summer, and said that the next move is likely to be an increase: 

"The decision to keep rates on hold will likely have unanimous support.  The risk is that the BOE turns more upbeat at exactly the wrong time.  The official forecasts for this year and next are above the median forecast (1.4% vs. 1.2% and 1.5% vs. 1.3%, official vs. median for 2017 and 2018, respectively)."

GBP/USD levels

With spot trading at 1.2494, we can see next resistance ahead at 1.2498 (Daily 100 SMA), 1.2504 (Weekly Low), 1.2511 (Daily Classic S1), 1.2516 (Yesterday's Low) and 1.2533 (Weekly Classic PP). Support below can be found at 1.2491 (Daily Low), 1.2467 (Daily Classic S2), 1.2465 (Hourly 200 SMA), 1.2419 (Daily Classic S3) and 1.2396 (Daily 20 SMA).

"Cable looks to be in correction mode still and the pound is poised to give back a little more of its recent gains and possibly retest support in the low 1.24s from here, argued analysts at Scotiabank, adding, "Minor gains to the mid/upper 1.25 area are likely to attract selling interest in the near-term."