GBP/USD is Testing 1.3020 and is Under Pressure at the Hourly Resistance Level

GBP/USD is flat in Asia at 1.3029, pressured by an hourly barrier, and has traded in a narrow range between 1.3022 and 1.3035. However, the pound has been losing ground against a strong euro, while remaining relatively stable against the US dollar in the late afternoon on Wednesday.

Overnight, investors focused on hawkish comments from European Central Bank officials, which fueled speculation that the central bank will soon boost interest rates, sending the euro to a one-week high. It was also solid in anticipation of French President Emmanuel Macron's reelection victory on Sunday following yesterday's debate.

Joachim Nagel, president of Germany's Bundesbank, joined a chorus of experts in predicting an ECB rate hike in the third quarter. Meanwhile, traders have remained focused on the Bank of England's future monetary policy course.

The Bank of England modified its rhetoric last month on the necessity for additional interest rate hikes while emphasizing the economy's downside risks. Catherine Mann, a Bank of England monetary policymaker, provided an in-depth and counterbalancing assessment of the MPC's issues.

"The critical aspect was the need to combat inflation," analysts at Westpac said, adding that the latter was viewed as more worrying and exhibiting signs of spreading to pricing schemes (second-round effects), including front-loaded rate hikes. "While tightening may be reconsidered if demand deteriorates, the converse may also be true if the economy continues to perform well and inflation remains persistent.' By the end of 2022, money markets are pricing in 160 basis points of BoE rate hikes.

GBP/USD