Last week, the British currency hit its highest levels since March against the US dollar, rising above 1.3180.
The main reason for this movement was the general drawdown of the US currency.
According to experts, the GBP/USD pair will go down as soon as the greenback stops weakening.
Pressure on the dollar has intensified in the past few weeks amid an increase in the number of COVID-19 infections in the United States, a steady decline in US government bond yields and a lack of consensus in Washington on additional financial stimulus.
Any improvement in investor sentiment towards the US dollar could easily push the GBP/USD pair back below the 200-day moving average, which is now in the 1.2900 region, Swissquote Bank said.
"The Bank of England has revised its view of negative interest rates, noting that it has other instruments of monetary policy at its disposal. This provoked a sharp surge in purchases of the pound after the meeting of the regulator. However, the doves in the central bank are likely to maintain their position due to the coronavirus pandemic and uncertainty around Brexit," the bank experts said.
"Finding the GBP/USD pair above 1.30 depends on the demand for the US dollar," they added.
Following the July meeting, the Bank of England left interest rates unchanged. The central bank also slightly improved its economic forecasts. However, investors are still citing the fact that the central bank may increase the volume of the quantitative easing (QE) program by the end of the year.
A number of UK data will be released this week. In particular, the report on the local labor market will be released on Tuesday, and the data on industrial production for June and the country's GDP in the second quarter will be published on Wednesday.
The British economy is expected to contract more than 20% in the reporting period.
The GBP/USD pair is still trading within the upward channel.
The upward trend support line is currently at 1.3025. Further support goes at 1.2985 and 1.2900.
Resistance is located at 1.3115, 1.3170 and 1.3184.
