GBP/USD flatlines, Pound Sterling churns the waters as BoE rate call looms

• GBP/USD has fallen into a sluggish steady-state on Tuesday.
• Cable continues to grind it out near the 1.3300 handle amid a lack of momentum.
• US PMI data soured on Tuesday, trimming risk appetite.

GBP/USD continues to chalk in a middling pattern through the week as investor sentiment takes a breather following a sharp readjustment of economic expectations last week. US labor data saw steep downside revisions through the second quarter, reigniting both hopes for Federal Reserve (Fed) rate cuts and fears of a widening recession.

Now that a Fed rate cut on September 17 is priced in as a sure thing, Cable markets are shifting focus to the Bank of England's (BoE) upcoming interest rate decision on Thursday. The BoE's Monetary Policy Committee (MPC) is likewise expected to vote seven-to-three in favor of a quarter-point interest rate cut.

US ISM Services PMI survey results sank to 50.1 in July, flubbing an expected increase to 51.5 from 50.8. Digging deeper into the data, most components of the ISM PMI report were in expansion territory, with the business activity, supplier deliveries, and prices index all showing improvement from the previous month. However, hiring expectations fell into contraction territory, with most businesses placing the blame on seasonal and weather factors. There were also sharp contractions in both new exports and imports activity expectations as tariff impacts continue to creep into US activity data.

GBP/USD technical outlook

The Pound Sterling (GBP) held onto late-week gains through the early week market sessions, and remains bolted to the 1.3300 region after a sharp technical bounce near the 200-day Exponential Moving Average (EMA) around 1.3150. A turnaround in Greenback flows helped to snap a six-day losing streak in the Cable, but now the burden is on GBP bulls to keep things keel-side down heading into the BoE's next rate call.

GBP/USD daily chart