Strategists at CIBC Capital Markets say they continue to sell pound-dollar rallies.

In a new briefing out Tuesday, strategists say "we remain mindful of chasing GBP/USD gains, only a close above the modest resistance in line with Friday’s 1.3370 high would test a bias towards fading immediate gains."

The pound fell to $1.3218 last Friday, a new Iran crisis low, as the effect of the conflict drove fresh demand for the dollar.

The pair has since risen back to 1.3318 as a more optimistic sentiment settled on markets at the start of the new week, with investors displaying a resolute optimism that the crisis will be over before long.

However, CIBC notes real money players have extended net GBP shorts for the last five snapshots.

"We can expect an extension of that trend, not least should labour market data, due immediately ahead of the BoE decision, underline a continued retreat in vacancies and underlying employment dynamics," says the note.

CIBC's strategists "remain biased towards GBP/USD retreating back towards the 5 November low at 1.3010 given Sterling’s high beta status, reliance on external capital inflows allied to the susceptibility of public finances being undermined by energy price influences."

The GBP/USD exchange rate has fallen steadily as oil prices have risen and traders reduced expectations that the Federal Reserve would lower interest rates in the coming months.

Wednesday's Fed decision should see Chair Jerome Powell express an abundance of caution over global headwinds and this should keep the dollar well bid.

Thursday's Bank of England decision will echo similar sentiments, which should also keep sterling bid against most peers.

With both central banks likely to shift in a 'hawkish' direction, the impact on GBP/USD will be limited, and the bigger cues will come from geopolitics and any signs of improvement in the Gulf conflict.