GBP/USD remains firm above 1.3400 mark, highest since March 2022

• GBP/USD scales higher for the fifth straight day and climbs to a fresh 20-month peak. 
• A combination of factors continues to weigh on the USD and lends support to the pair.
• The BoE's relatively hawkish stance underpins the GBP and contributes to the move up.

The GBP/USD pair builds on its recent gains registered over the past two weeks and advances to its highest level since March 2022, around the 1.3430 region during the Asian session on Wednesday. Meanwhile, the fundamental backdrop suggests that the path of least resistance for spot prices is to the upside, though slightly overbought conditions on the daily chart warrant some caution for bullish traders. 

The British Pound (GBP) continues to draw support from expectations that the Bank of England's (BoE) rate-cutting cycle is more likely to be slower than in the United States (US). In fact, BoE Governor Andrew Bailey said on Tuesday that the path for interest rates will be downwards, though the progress in this direction will be slow and unlikely to fall back to ultra-low levels without very big shocks. In contrast, the markets have been pricing in a more aggressive policy easing by the Federal Reserve (Fed), which keeps the US Dollar (USD) depressed near the YTD low and acts as a tailwind for the GBP/USD pair. 

According to the CME Group's FedWatch Tool, the markets are currently pricing in over a 75% chance that the Federal Reserve will cut interest rates by another 50 basis points in November. Adding to this, Tuesday's weaker US macro data, along with the prevalent risk-on environment, continues to undermine the safe-haven buck and validates the near-term positive outlook for the GBP/USD pair. That said, the Relative Strength Index (RSI) on the daily chart has climbed beyond the 70 mark, making it prudent to wait for some near-term consolidation or a modest pullback and positioning for any further appreciating move. 

Moving ahead, there isn't any relevant market-moving economic data due for release from the UK on Wednesday. That said, a scheduled speech by the BoE MPC Member Megan Greene might influence the GBP and provide some impetus to the GBP/USD pair. Later during the early North American session, New Home Sales data from the US might contribute to producing short-term trading opportunities. Traders, however, might refrain from placing aggressive bets ahead of speeches by influential FOMC members this week, including the Fed Chair Jerome Powell on Thursday, and the US PCE Price Index on Friday.