GBP/USD is forming a bearish pattern on the hourly chart ahead of the BoE rate decision tomorrow

• GBP/USD is trading 0.20% lower as some USD strength kicked in earlier in the session.
• There is some support at the previous wave low that needs to be broken.

GBP/USD 1-hour chart

GBP/USD has had a distinct lack of newsflow on Wednesday. UK CPI printed in-line with expectations but the market is waiting for the Bank of England (BoE) meeting tomorrow (Thursday). There are some analysts expecting another bumper BoE stimulus package. This would send GBP higher as in this upside-down world more supply doesn't signal weakness but strength in dealing with the coronavirus issues. 

The base case scenario for analysts is another additional GBP 100bln to be added to the central bank's stimulus program. There is a case for some of the MPC members to even more dovish and want to add more. This could send the pound even higher but in the past, the BoE have done regular small amounts rather than one large suprise.

Looking close at the technicals now, the market has recently started making lower highs and lower lows on the hourly chart. The price is also trading under the 200 and 55 moving averages. 

The bullish targets are the next wave high of 1.2687 and the high on the chart at 1.2813. It would take a big QE package to get the price close to that on the day of some forward guidance suggesting a consistent plan of incremental increases.

The key here would be a break of the trendline low and the support level just above 1.2450. This could send the pair into the abyss as the next support lower down is at 1.2363. If the BoE adopt a wait and see policy or disappoint on the size of the QE package there is a good chance the downside support could break. Obviously a lot depends on the BoE tomorrow so keep a close eye on events and the levels mentioned above. 

Additional levels