GBP/USD is trading at the lows for the day amid a firmer dollar, though the pound is also lagging slightly against the rest of the major currencies bloc. The pair is down 0.4% to 1.2628 but remains stuck in a consolidative range in the bigger picture:

That could very well change in the aftermath of the BOE meeting later today. While the central bank is expected to keep rates unchanged, there will be plenty of focus and scrutiny on the statement language and Bailey’s press conference.

I shared some food for thought earlier here: The central bank spotlight continues with the BOE today

Going back to GBP/USD, there has been some consolidation around 1.2600 to 1.2800 as of late. And eventually, something’s gotta give.

A more dovish BOE today could put in motion a breakdown of the above range. And that will tee up a drive towards the 200-day moving average (blue line) next with sellers eyeing the December lows near 1.2500 potentially as well.

This article was written by Justin Low at www.forexlive.com.