GBP/USD stabilizing on the 1.31 handle as traders now assess Brexit risks vs BoE meeting 2nd Aug

• There are no comments on the outlook or next week's BOE meeting from BOE Deputy Governor Broadbent.
• Odds that are back near 70% for the August the 2nd's meeting for a hike - according to BOEWATCH - that is something that could favour a bid in cable as  UK  parliament is about to begin a six-week summer recess on Tuesday.

GBP/USD is currently trading at 1.3104 at the time of writing, unnerved by comments from BOE Deputy Governor Broadbent who has delivered a speech on the history and future of QE, given to the Society of Professional Economists, London.

"In this speech, Ben Broadbent argues that the effects of QE (quantitative easing) probably vary, depending on economic conditions and on what the central bank communicates about the overall stance of policy. He then discusses the MPC’s approach to unwinding QE," - BoE.

There are no comments on the outlook or next week's BOE meeting, although, he has explained that if inflation pressures weaken after QE reversal, the first response will be to cut rates. The market will now have to wait for further headlines, from a domestic point of view, regarding Brexit and wait for next week's BoE to see whether the MPC are preparing for a no deal Brexit to whether the most recent surprise disappointment in inflation data will sway their outlook and decision this time around. 

GBP/USD is carving out a southerly trajectory in a descending channel on the five-minute chart

Meanwhile, GBP/USD is carving out a southerly trajectory in a descending channel on the five-minute chart, trading within a narrow range between 1.3095 and a recent high of 1.3109, capped by the bearish 50-5min SMA at 1.3110 within the broader hourly decent from the Asian 1.3158 highs when the Yen sparked-off a sell-off in the dollar. 

However, there could be some upside adjustment for sterling given that the UK  parliament is about to begin a six-week summer recess on Tuesday. This should cut out some fo the Brexit noise and if the odds that are back near 70% for the August the 2nd's meeting for a hike - according to BOEWATCH - that is something that could favour a bid in cable. 

GBP/USD levels

The pound has been capped by the 50-D SMA is now located at 1.3279 and the weekly cloud top level. Sterling has been in a steep decline with RSI only now starting to recover from just outside of oversold territory and the hourly sticks show stability here at 1.31 the figure. 

"GBP/USD’s low last week of 1.2957 was accompanied with a divergence of the daily RSI. Directly below here lies Fibonacci support at 1.2918 (50% retracement of the move up from 2016) and we are seeing some profit taking here. We would allow for recovery to the 1.3302/07 55 day ma and channel resistance,"

- analysts at Commerzbank explained.

Further out, 1.3461/80 comes before the convergence of the 200-D SMA (1.3585) and 1.3597/1.3600.