GBP/USD: bulls need sustain gains above 1.3600/17, or else say 'adiós' below 200-D SMA

• GBP/USD: mixed technical outlook, near-term bullish, longer-term bearish.
• GBP/USD: UK data continues to disappoint, 1/10 chance of a BoE rate hike? 

GBP/USD has been signalling further downside to come on the 4hr sticks while the hourly sticks turn bullish but with a lack conviction, trumped by the daily sticks that have attacked the 200-D SMA. Currently, GBP/USD is trading at 1.3572, down -0.01% on the day, having posted a daily high at 1.3631 and low at 1.3538.

• UK data: traders pare back expectations for BoE tightening - Scotiabank 
• Theresa May’s leadership in danger on her customs’ plan

Sterling has been sent into a tailspin of bearish fundamental headline of late, from data misses to political concerns that have weighed on sentiment in the pound and economic recovery in general. Cable slid to a low of 1.3572 earlier on the back of April's sub-consensus UK service PMI that arrived at 52.8 vs 53.5 expected, adding to the series of data disappointments of late. At the same time, news that the UK PM, Theresa May, is having issues with her inner Cabinet on how to deal with future trade relations with the EU, sent the GBP/USD to a fresh 4-month low. 

All eyes on BoE policy decision and Inflation Report (Thurs 10 May):

We have the BoE around the corner and it is now unlikely that there will be a rate hike as soon as this meeting around.  

"We expect no move in policy rates this month but expect the Bank to continue to point to the need for gradual and limited policy tightening on the assumption of a recovery in the data. For more analysis see our main article in this publication," analysts at Nomura said.

GBP/USD levels

"GBP/USD’s sell-off is approaching the 200-day ma at 1.3538 and it is possible that this will provoke some consolidation. Intraday rallies are indicated to terminate at circa 1.3715/1.3815 and we have divergence on the intraday charts. We would, therefore, allow for some near-term profit taking," analysts at Commerzbank argued. 

GBPUSD price signals retain a negative undertone, with modest gains through the low 1.36s attracting firm selling pressure," analysts at Scotiabank noted, adding, "trend strength oscillators are bearish on the short and medium-term charts and are tilting negative on the longer term (weekly) studies as well. Sustained gains above 1.3605/10 may allow for a little more strength intraday but we still rather think modest GBP gains are a sell while the market remains below 1.3715."