GBP/USD continuing to drift towards 1.35 with markets waiting for the BoE's interest rate call

• The GBP is exposing its weak underbelly as the US Dollar resumes climbing.
• Data-light Wednesday leads into the BoE's Super Thursday rate call.

The Sterling is steadily falling in the pre-European market session, and the GBP/USD pair is beginning to test beneath the 1.3530 level.

The GBP experienced a quick fall in Tuesday's trading, but the pair was able to recover and end only slightly lower on the day. With the US Dollar continuing to be well-bid by markets following the US' pulling out of the Iranian denuclearization accord, the GBP/USD is falling apart once again. With the pair trading into the 200-day SMA for four straight trading days, the Sterling is suffering from a notable lack of momentum, and an inability to pull itself away from the key indicator. With little of consequence on the docket for Wednesday's session, markets have turned their eyes to the Bank of England's (BoE) Thursday showing, which sees the central bank likely to hold steady on interest rates after markets spent months getting ramped up for a May rate hike. Softening economic data has forced the BoE's Mark Carney to walk back his hawkish rhetoric, and the BoE is expected to hold off on any rate increases until mid-2019.

GBP/USD analysis: consolidating near multi-month lows, waiting for BOE

GBP/USD levels to watch

As FXStreet's Chief Analyst, Valeria Bednarik, summed up her analysis of the GBP/USD: "Wednesday will offer a data-light calendar from the UK, with attention centered in the upcoming BOE's Super Thursday. The intraday recovery pushed the pair up to its 20 SMA in the 4 hours chart, with the pair still unable to clearly break above the indicator. The Momentum turned higher in neutral territory, while the RSI bounced from oversold readings but remains below its mid-line, limiting the upward potential to a corrective movement, more likely after the pair lost roughly 900 pips. The pair has bottomed at 1.3481 last July, making of the 1.3480 region a strong support for the upcoming sessions, with a break below the level probably initiating a steeper downward move."

Support levels: 1.3480 1.3445 1.3410

Resistance levels: 1.3550 1.3590 1.3625