GBP/USD retests 1.3200 in early Europe, BOE in spotlight

The GBP/USD pair is seen reversing a minor pullback and now attempts to regain 1.32 handle amid a risk-friendly environment ahead of the much-awaited BOE monetary policy decision due later today.

GBP/USD bounces-off a dip near 1.3180

Currently, GBP/USD now rises 0.43% to 1.3203, reversing a brief to near 1.3180 region. The bulls tighten their grip once again, taking the cable back above 1.32 barrier, as investors take profits off the table after the recent decline heading into the BOE events scheduled later in the European session.

Meanwhile, the sentiment remains buoyed on the back of higher stocks and oil prices, supporting demand for higher-yielding/ risk currencies such as the GBP. However, the recovery appears fragile as the pound remains vulnerable amid expectations that the BOE will slash rates for the first time in seven years today, in a bid to combat the Brexit fallout. Moreover, further easing will remain on cards at its monetary policy meeting next month.

GBP/USD Levels to consider

The pair has an immediate resistance at 1.3250/68 (psychological levels/ daily R1), above which 1.3300 (round figure) would be tested. On the flip side, support is seen at 1.3150  below that at 1.3100 (5-DMA).