GBP/USD ticks up above 1.2550 as US Dollar recovery stalls
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- The pound picks up on Monday with the USD losing steam.
- Cooling hopes of Fed cuts are likely to keep US Dollar losses limited.
- GBP/USD is expected to meet resistance at 1.2600.
The Sterling is trimming some losses on Monday’s European session, with the US Dollar losing upside momentum. The broader bearish trend, however, remains active, with investors cautious ahead of key UK data and major central banks’ decisions.
US employment data has boosted the US Dollar
US employment data boosted the Dollar last Friday, with the Nonfarm payrolls beating expectations and wages growing too fast to allow the Federal Reserve to start cutting rates in the coming months. This is likely to cushion US Dollar declines over the coming sessions.
In the calendar, Tuesday’s UK Employment data and the US CPI will attract the market focus ahead of the all-important Fed monetary policy meeting on Wednesday.
The US central bank is expected to leave its benchmark rate on hold. The main attraction of the event will be the MPC members’ interest rate projections and Powell’s press conference for hints about any dovish turn that would hurt the US Dollar.
On Thursday, the BoE will keep rates on hold, with BoE Bailey expected to give more info about the bank’s next steps.
GBP/USD rebound to meet resistance at 1.2600
The technical picture shows the pair gathering bullish strength, yet still below 1.2600 resistance, which would negate the near-term corrective mood, and expose 1.2650 ahead of the mentioned 1.2730.
On the downside, supports are Friadau’s low at 1.2500 and November 22 low at 1.2450.
Technical levels to watch
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