In fact, GBP/USD has been sidelined a touch below 1.70, but still remains within touching distance of that level. The 1.70 mark seems to be capping gains at the moment and I feel it will continue to do so until we get a fresh catalyst.
There are a few releases this week which could trigger some sterling volatility. The data kicks off with UK CPI expected to show a 1.7% rise. In fact, the market is looking for a minor pullback in the May CPI reading. Any signs of further strength in price momentum could push the sterling higher in the near term and finally see it break that barrier against the greenback. This will then be followed by the BoE MPC minutes tomorrow and retail sales on Thursday.
A change in bias among BoE members on the rate hike timing will only fuel the rate hike argument further. To the contrary, if data and commentary suggests caution is needed, then this 1.70 level could be a barrier that triggers a near-term pullback. To the upside, I would wait to see a close above 1.70 before buying cable.