GBP/USD consolidates below 1.28 ahead of Thursday’s BoE decision. Economists at Scotiabank analyze the pair’s outlook.

Cable should continue to find support on dips

Markets remain undecided about whether the BoE will deliver a 25 or 50 bps hike but the GBP should continue to find support on dips from positive yield spreads against the USD along the curve for now.

The GBP should find support in the short-run around 1.2725/50. 

Resistance is 1.2810 and 1.2875. Gains through 1.29 are needed to give Cable a stronger, technical lift, however.