GBPUSD falls sharply as traders turn bets for BoE’s dovish hike or staying on hold on Nov 2 policy meeting

Cable fell sharply on Tuesday and establishing below 1.3200 handle after UK inflation data release did not produce enough thrust for stronger upside action, despite CPI hitting the highest level in more than five years.
Focus turned on UK interest rates, as rate hike in November was widely expected scenario, but some dissonant tones these days eroded strong optimism.
BoE’s chief Carney said on Tuesday that balance between inflation and supporting economic activity is needed. In addition, MPC new member Ramsden commented that inflation is well anchored, while another member Tenreyro said is not ready to vote for rate hike.
All these turned the story about rate hike from extremely hawkish approach to the situation when 30% of the policymakers has neutral stance ahead of Nov 2 MPC policy meeting.
Sudden change in policy view just two weeks ahead of BoE’s policy meeting turns traders’ bets towards dovish hike and even betting MPC will stay on hold.
Pound’s reaction was negative, with stronger bearish acceleration on Tuesday, erasing over 50% of last week’s strong rally and shifting focus lower.
Also, fresh weakness confirms reversal signal from Monday’s bearish engulfing pattern, signaling further easing after bears broke below pivotal support at 1.3182 (daily Tenkan-sen).
Fresh bears pressure next strong support at 1.3141 (55SMA / Fibo 61.8% of 1.3026/1.3337) which contained last week’s repeated downside attempts and marks trigger for further downside on break.
Close below broken Tenkan-sen will generate bearish signal and support scenario.

Res: 1.3182; 1.3218; 1.3264; 1.3287
Sup: 1.3141; 1.3121; 1.3100; 1.3026