GBP/USD stands flat, markets await key data releases and Federal Reserve minutes for direction

In Monday's session, the GBP/USD traded with mild losses at the 1.2597 level. The market showed a limited market movement due to the absence of high-tier economic releases and the Presidents' Day holiday, taking the US Traders out of the picture.

For the rest of the week, on Thursday, the preliminary February Manufacturing and Services PMI surveys for the UK and the US will be looked upon for fresh impetus. On Wednesday, the Federal Reserve (Fed) will release the minutes of the January policy meeting. As for now, markets are delaying the start of the easing cycle for both the Fed and Bank of England (BoE) due to both blocks not showing enough evidence of the inflationary pressures coming down. On the one hand, the Fed’s minutes might show markets explicitly how open are the bank’s officials to start cutting while the PMIs will give additional information on the health of both economies. Both reports might fuel volatility on the pair as they may affect the bets and timing of the start of the Fed’s and BoE’s cutting cycles.

GBP/USD technical analysis

The GBPUSD pair reveals a somewhat scenario, with the Relative Strength Index (RSI) currently in the negative territory. The daily RSI suggests that the recent momentum has been predominantly driven by the sellers, further echoed by the MACD histogram consistently printing red bars, indicating a negative momentum.

Looking at the pair's overall trend position, while the bears seem to have short-term control with the pair trading below the 20-day Simple Moving Average (SMA), the bulls maintain their dominance on the larger time frames as the pair is yet to trade below the 100 and 200-day SMAs. In that sense, indicators suggest a flattening momentum as market participants await fresh catalysts but that the overall trend favors the sellers.

GBP/USD daily chart