Pound Sterling faces pressure as the BoE turns slightly dovish.

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• Pound Sterling faces pressure as the BoE turns slightly dovish.
• BoE Bailey supports market expectations for rate cuts.
• Investors await the FOMC minutes for fresh guidance.

The Pound Sterling (GBP) struggles to hold onto gains in Wednesday’s European session after printing a fresh weekly high near 1.2670. The upside move in the GBP/USD pair on Tuesday was inconsistent with the pace at which the US Dollar fell due to slightly dovish commentary from Bank of England (BoE) Governor Andrew Bailey and other policymakers speaking before UK lawmakers at the UK parliamentary Treasury Select Committee.

Andrew Bailey said market expectations for rate cuts are not “unreasonable” and there are “encouraging signs” that price pressures are easing but refused to comment on the timing and degree of restrictive policy unwinding.

BoE Deputy Governor Ben Broadbent said the central bank’s focus has shifted from the degree of restrictive monetary policy to its duration. Meanwhile, BoE policymaker Swati Dhingra warned about downside risks of restrictive interest rates to the UK economy.

In today’s session, action in the Cable will be guided by the Federal Open Market Committee (FOMC) minutes, which will be published at 19:00 GMT.

Pound Sterling faces pressure while attempting to recapture a two-week high of 1.2684. The GBP/USD pair is broadly sideways amid a Descending Triangle formation on a daily timeframe. The aforementioned chart pattern indicates a sharp contraction of volatility but with a slightly negative bias due to the formation of lower highs.

The downward-sloping border of the Descending Triangle pattern is plotted from December 28 high at 1.2827, while the horizontal support is placed from December 13 low near 1.2500.

The 20 and 50-day Exponential Moving Averages (EMAs) near 1.2630 continue to act as a barricade for the Pound Sterling bulls.

Meanwhile, 14-period Relative Strength Index (RSI) oscillates in the 40.00-60.00 range, indicating an indecisiveness among market participants.

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