The GBP/USD inched up 0.55% on Thursday to close at 1.544 dollars per British pound, despite that the Bank of England (BoE) voted 8-1 to keep interest rates on hold at 0.5%. The BoE cited risks from the slowing Chinese economy, as well as from other emerging countries, had increased since the last meeting. The bank also lowered its estimate for UK economic growth in the third quarter of this year, from 0.7% down to 0.6%. 

The BoE’s decision came as no surprise as the Office for National Statistics (ONS) said on Wednesday that Britain’s overall trade deficit in goods and services widened to £3.4bn in July from £2.6 billion in June, as exports dropped £2.3 billion to £22.8 billion in July 2015, the lowest level since September 2010. The ONS also said that UK factory output fell by 0.5% in July, compared with June. Overall industrial production, which includes mining and energy as well as manufacturing, fell by 0.4% year-on-year in July.

The British pound could get some support from last Friday's non-farm payrolls report by the U.S Labor Department that came in at 174,000 for August, well below Wall Street economists' expectations of 222,000. The jobs reports missed expectations for three months straight. Although the U.S. unemployment rate fell to 5.1%, the lowest since early 2008, more than 261,000 people left the labor force and were not counted in August.

According to the latest poll by Reuters, 10 of 17 primary dealers, or the banks that directly deal with the Federal Reserve, now say they expect the Federal Reserve to raise rates in the fourth quarter of 2015 or later.

In the time period since China's benchmark Shanghai Composite index meltdown at the end of August until the release of the U.S. non-farm payrolls report last Friday, currency traders have sold major currencies, including the U.S. dollar and British pound, and bought Japanese yen as a safe-haven trade. 

The economic data for the U.S. and UK are still a mixed bag at best. Last week, market research group Markit said its UK manufacturing purchasing managers' index (PMI) fell to 51.5 in August, down from 51.9 in July, while the August services PMI dropped to 55.6 from a reading of 57.4 in July. Analysts had expected the services index to rise to 57.6 in August. For the index, a level above 50.0 indicates expansion in the industry, below 50.0 indicates contraction.

As of September 8, there are 39,446 short positions of British pound sterling (CME:6B), traded on the Chicago Mercantile Exchange (CME), by leveraged funds, a week-over-week increase of 7,718 short positions. This is compared to about 53,722 long positions, down 14,569 from the previous week, according to the Commitment of Traders (COT) data released by the Commodity Futures Trading Commission (CFTC) each Friday.

Hedge funds have decreased their net long positions about 22,287 contracts from the previous week, where British pound sterling contracts are traded in units of 62,500 GBP. The reduction in the net long positions reflected the GBP/USD price movement last week.

Technically, the GBP/USD has been trading in a symmetrical triangle, a trading band, between 1.515 and 1.581 dollars per British pound since late April. Although a golden cross was triggered at the end of June, where the 50-day SMA crosses above the 200-day SMA, the indicator seems to be unreliable as the currency pair still struggled within the trading range. 

The direction in which the cable will be heading next could well depend upon the Federal Reserve rate hike decision on September 17. Concerns about China’s economic hard landing and turmoil in global financial markets, which have sent the Japanese yen skyrocketing, could return after the Federal Reserve meeting.