GBPUSD is trending lower and moving inside a descending channel on its 1-hour time frame. Price is currently testing the resistance and could be due for a drop to support soon.

The 100 SMA is below the longer-term 200 SMA so the path of least resistance is to the downside. In other words, the selloff is more likely to resume than to reverse. In that case, price could drop to the 1.3300 handle or lower.

Stochastic is still heading north to show that a bit of bullish momentum is present but the oscillator is also nearing overbought levels to signal rally exhaustion. Turning lower could confirm that bearish pressure is returning.

The BOE kept monetary policy unchanged in this week’s statement as expected. Policymakers voted unanimously to keep interest rates and asset purchases on hold. The central bank also cited Brexit as a risk to their economic outlook.

As for the dollar, the currency has been able to hold its ground thanks to upbeat data. Headline retail sales rose 0.8% versus the estimated 0.3% gain while the core reading posted a 1.0% jump versus the estimated 0.6% increase.

Only the BOE quarterly bulletin and a speech by MPC member Haldane are lined up from the UK today while the US has industrial production and capacity utilization numbers due. The Empire State manufacturing index is also due today.

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