GBP/USD Tests 1.2950 Support as BoE Decision Looms; Oil Rallies on Supply

GBP/USD declined 0.5% to 1.2960 in early London trading, approaching critical support at 1.2950 ahead of Thursday's Bank of England rate decision. Sterling weakness reflects growing expectations the BoE will maintain its cautious stance amid persistent UK inflation concerns and slowing growth momentum. The pair has fallen from 1.3100 resistance, with bearish momentum accelerating below the 50-day moving average at 1.3020. Meanwhile, WTI crude oil futures surged 2.1% to $71.40 per barrel on supply disruption fears from Middle East tensions and stronger Chinese demand indicators. The oil rally supported commodity currencies, with CAD/USD gaining 0.3% despite broader dollar strength. Technical analysis shows GBP/USD facing immediate support at 1.2950, with a break potentially opening 1.2900. Traders are positioning for volatility around the BoE announcement, with options pricing suggesting 80-pip movement potential.