GBP/USD is on the retreat ahead of the BOE rate decision

GBP/USD is losing altitude in the Asian session, now trading at 1.2265 compared to the North American session high of 1.2309 as investors turn their attention to the Bank of England rate decision.

BOE stuck between a rock and a hard place

Brits are feeling the pinch of rising food inflation, which is evident from the drop in the retail sales. Wage data released yesterday also brought bad news. There is clear sign that the initial post-Brexit referendum boom is running of out of steam.

A combination of high inflation and a weak economy, coupled with the falling housing prices mean the BOE is going to have a tough time moving rates in either direction.

The spot was last seen trading around 1.2270 levels.

GBP/USD Technical Levels

A break above 1.2285 (38.2% fib retracement of 1.2570-1.2109) would open up upside towards 1.2346 (Feb 7 high) and 1.2370 (Jan 23 low). On the other hand, a breakdown of support at 1.2251 (Mar 13 high) could yield a sell-off to 1.2215 (10-DMA) and 1.22 (zero figure) levels.