- GBP/USD bears step on the gas at the start of the week into test near to 1.35 the figure.
- US events, Brexit, Covid and central banks outlooks to be the driving forces this week.
GBP/USD is on the back foot to start the week, -0.15% at the time of writing. Cable is sinking from 1.3535 to a low of 1.3507 so far, technically bound for further downside to come for the forthcoming sessions, see below.
Meanwhile, the volumes in forex and markets, in general, are not going to arrive until nations such as Japan, Australia and the UK return from holidays. However, while there is little in the way of domestic data from the Uk, the week will quickly move into gear with a busy US schedule on the calendar.
The main event will likely come at the end of the week from the US jobs market with the US Nonfarm Payrolls report. ''The late-December COVID surge likely came too late to prevent a pickup in US payrolls after the gain in November (210k) appeared to be held down by an overly aggressive seasonal factor,'' analysts at TD Securities explained.
US ISMs on the 4th will also be key. The levels should remain high according to analysts at TD securities. ''We expect the services index to decline more markedly following November's eye-popping jump to 69.1—an all-time high—and given the likely initial impact from Omicron. The MFG index probably fell below the 60 mark for the first time in four months. Anything over 60 is exceptionally strong.''
The other main event will come with the Federal Open Market Committee minutes. These are following the FOMC's decision to double the pace of QE tapering and the projection of a significantly more hawkish dot plot will be the focus before then. ''Focus will now turn to the elements that led to the evolution of views among policymakers (including on "maximum employment") after the November meeting,'' analysts at TD Securities said.
Domestic risks for GBP
As for the pound, the surprise rate hike by the Bank of England at its December meeting gave the currency some time-limited support. The fast spread of the Omicron variant in the UK has been a weight since in particular as the government may opt to impose some new restrictions following the holidays. Brexit is also likely to snap back and make for political turmoil that may also weigh on GBP as markets attempt to re-assess the Brexit policy.
GBP/USD technical analysis
The hourly chart shows prospects of a price running into support near 1.35 the figure and correcting back to the upside for a higher high for the coming sessions.
For the weekly chart, we see a W-formation:
While there are prospects of a shallow correction as per the hourly analysis, the weekly perspective is far more bearish. The W-formation is a reversion pattern that has a high completion rate, in that the price would be expected to be drawn to the neckline of the pattern. The neckline comes in at around a 61.8% Fibonacci retracement near to 1.3320.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks

USD/JPY remains close to two-week high ahead of BoJ-Fed policy decisions
USD/JPY attracts fresh buyers during the Asian session on Wednesday and stalls the overnight modest pullback from the vicinity of the 150.00 mark or a two-week high. The upside, however, seems limited amid the divergent BoJ-Fed expectations. Hence, the focus will remain on the crucial BoJ policy decision and the outcome of a two-day FOMC meeting later today.

AUD/USD holds steady above mid-0.6300s, FOMC decision awaited
AUD/USD consolidates below a three-week high touched on Tuesday as traders opt to move to the sidelines ahead of the crucial Fed policy decision. The USD languishes near a five-month low amid bets that the Fed will cut rates several times this year, which, along with the optimism over China's stimulus measures, could act as a tailwind for the pair.

Gold price sits near all-time peak, looks to Fed for fresh impetus
Gold price remains close to the record high touched on Tuesday as rising Middle East tensions and the uncertainty over Trump's trade policies continue to underpin the safe-haven bullion. Bulls, however, take a pause for a breather amid slightly overbought conditions and ahead of the crucial Fed policy decision.

Bank of Japan set to hold interest rates unchanged in March
The Bank of Japan is on track to keep the short-term interest rate steady at 0.50% following its two-day March monetary policy review on Wednesday. Any signals on the timing and the scope of future rate hikes by the BoJ will likely infuse intense volatility around the Japanese Yen.

Tariff wars are stories that usually end badly
In a 1933 article on national self-sufficiency1, British economist John Maynard Keynes advised “those who seek to disembarrass a country from its entanglements” to be “very slow and wary” and illustrated his point with the following image: “It should not be a matter of tearing up roots but of slowly training a plant to grow in a different direction”.

The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.