"CitiFX Technicals recommend putting on structural short in GBPUSD. The pair looks like it is a clear double top - the double top neckline stands at 1.1842 and a break signals a target around 1.1250," CitiFX Wire.

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The Pound to Dollar exchange rate neared one-week highs and its 55-day moving average in the penultimate session of the week, placing directly in the crosshairs of sellers who've recently advocated bearish bets against Sterling owing to concerns about structural problems weighing on the UK economy.

Sterling was testing its 55-day moving average on Thursday as the U.S. Dollar reversed Wednesday gains and stock markets climbed with the aid of a soft bid for government bonds that was incongruous with some of the latest remarks from Bank of England (BoE).

"You had mixed messages from the BoE as the doves and hawks were both speaking. Tenyero all but guarantees that inflation is falling and wants rate cuts but Bailey and others sound a bit more pragmatic," says Brad Bechtel, global head of FX at Jefferies.

"I still see no reason to own the GBP and yes the GBP/USD will move on the USD gyrations this way and that, but GBP generally is overvalued at current prices against most currencies and should be sold on rallies," Bechtel writes in Thursday market commentary.

Above: Pound to Dollar rate shown at daily intervals with 55-day moving average. Click image for closer inspection.

These gains brought the Pound to Dollar rate within arm's reach of the 55-day average at 1.2178 that was given up in a sell-off that followed last Friday's non-farm payrolls report and was enough to get strategists and traders at Citi anticipating further declines ahead.

"GBPUSD downside continues to look decent, having broken the 55d MA, the trend line support, and ending the week near 1.2050. CitiFX Technicals recommend putting on structural short in GBPUSD. The pair looks like it is a clear double top - the double top neckline stands at 1.1842 and a break signals a target around 1.1250," reads one posting on the CitiFX Wire from Monday.

While the above-referenced trade was motivated by technical developments on the charts, the bank's "London trader remains short Cable [GBP/USD] whilst below major resistance at 1.2470 and will look to add to EURGBP."

Citi FX strategists and traders harbour bearish views on the UK's economic fundamentals including prospects for house prices, which are sometimes positively correlated with the currency, due to rising borrowing costs having a dampening effect mortgage eligibility and demand.

The bank advocated selling GBP/JPY alongside GBP/CAD ahead of last Thursday's BoE decision to lift Bank Rate from 3.5% to 4%.

Above: Pound to Dollar rate shown at weekly intervals with 55-week moving average. Click image for closer inspection. To optimise the timing of international payments you could consider setting a free FX rate alert here.

Citi is far from alone in viewing the outlook for Sterling as a bearish one, however, as others cite factors like the UK's bloated trade in goods deficit and energy insecurity as being indicative of structural economic vulnerability and downside risk for the currency.

"We think the initial transition to a higher than expected interest rate profile will be sterling negative, because it will raise the perceived risks of an economic hard landing," says Stephen Gallo, European head of FX strategy at BMO Capital Markets.

"On a medium-term basis, the UK has a finite amount of storage capacity and is structurally dependent on imported energy. In addition to lower trend growth, the UK's BoP fundamental will be a persistent source of GBP shock risk," he adds in a Monday review of BMO's GBP/USD forecasts.

Gallo's latest forecasts suggest the Pound is likely to around 1.21 in one-month and 1.25 nine-months ahead, which might be suggestive of Sterling already having come close to peaking for the year at the turn of the month.

Source: BMO Capital Markets.