GBP/USD Review: Sterling pushing south of 1.31 ahead of US Fed, BoE volatility

• The GBP/USD has returned to a bearish holding pattern ahead of UK PMI figures for today.
• The US Fed will be beating the BoE to the market this week, and Sterling-Dollar traders will be seeing action from both central banks for the second half of the week.

The GBP/USD is testing just beneath the 1.3100 major level ahead of Wednesday's London market session.

Mid-tier Markit PMIs for the UK will be dropping at 08:30 GMT, but trader's will be focusing on the US session's Federal Reserve rate call; markets are expecting the FOMC to hold steady for the time being in favour of making another rate hike in September, but markets will be keeping a close eye on the proceedings, looking out for any hints about policy adjustments in the meantime.

The Bank of England (BoE) will be dropping an interest rate call on Thursday, and Sterling traders are tensing up ahead of the key release from the BoE. The odds of an expected rate hike are becoming questionable after key economic data for the UK's economy have been on the disappointing side in recent weeks, and market participants are beginning to second-guess the central bank's next step.

GBP/USD Technical Analysis

The Sterling is drifting into recent swing lows ahead of the central bank action for the mid-week, with the US Fed and BoE both dropping into markets with critical rate calls. Key support is currently holding at last week's lows near 1.3075, and a break lower will see the GBP/USD on pace to set fresh lows for 2018, while higher timeframes show the pair under pressure from sequential lower highs.

GBP/USD Chart, 15-Minute