The GBP/USD pair briefly tested a fresh four-week high above 1.2840 before dropping back on Monday. With limited UK data releases, traders are dealing with conflicting expectations of rate cuts from the Bank of England and the cautious approach by the Federal Reserve. Fed Chair Jerome Powell is scheduled to deliver the semiannual Monetary Policy Report to the US Senate Banking Committee, with key US inflation data due later in the week. The US Consumer Price Index (CPI) and Producer Price Index (PPI) are both expected to either hold steady or tick slightly upwards.
On the technical side, the GBP/USD pair has rallied from July’s low near 1.2600 but has struggled to breach the key peak at 1.2860. The pair is currently trading above the 200-hour Exponential Moving Average (EMA) at 1.2735, but bullish momentum may be waning. Daily candles are showing signs of a bearish turnaround, and price action has remained above the 200-day EMA at 1.2609. Traders are closely monitoring these technical levels to gauge the direction of the pair.
The Pound Sterling (GBP) is the oldest currency in the world and the official currency of the United Kingdom. It is the fourth most traded currency in the world, with key trading pairs including GBP/USD, GBP/JPY, and EUR/GBP. The value of the Pound Sterling is highly influenced by monetary policy decisions made by the Bank of England, with interest rates being a key factor. Data releases such as GDP, Manufacturing and Services PMIs, and employment numbers also impact the value of the GBP. Additionally, the Trade Balance indicator plays a significant role in determining the strength of the currency.
Overall, the GBP/USD pair is facing a mixed outlook with conflicting factors at play. Traders are awaiting key data releases and speeches from Fed Chair Powell to determine the future direction of the pair. The technical levels of the GBP/USD pair will also be closely watched for potential signals of a bullish or bearish trend. With limited UK data this week, focus will remain on US inflation figures and the Fed’s stance on rate cuts. The Pound Sterling’s value will continue to be influenced by both domestic and global economic factors, making it a closely watched currency pair in the forex market.
