- GBP/USD fluctuates at around 1.2600 to begin the new week.
- Pound Sterling sellers could remain interested in case 1.2600 stays intact as resistance.
- BoE policymaker Mann will be delivering a speech later in the day.
GBP/USD is having a difficult time staging a rebound after losing more than 1% in the previous week. The pair fluctuates in a narrow channel near 1.2600 in the European morning as investors await comments from central bankers.
The renewed US Dollar (USD) strength in the second half of the previous week weighed heavily on GBP/USD. The Federal Reserve’s revised Summary of Economic Projections and Chairman Jerome Powell’s relatively optimistic comments about the inflation outlook revived expectations for a rate cut in June and hurt the USD late Wednesday. Upbeat macroeconomic data releases from the US, however, helped the currency outperform its rivals on Thursday and Friday.
Meanwhile, the dovish shift seen in the Bank of England’s voting pattern didn’t allow Pound Sterling to stay resilient. BoE policymaker Catherine Mann, who voted for a no change in the policy rate after having voted for a hike in the previous meeting, will be delivering a speech later in the day.
The US economic docket will not offer any high-impact data releases that could potentially influence the USD’s valuation in a noticeable way. Instead, market participants will pay close attention to remarks from Fed policymakers. Atlanta Fed President Raphael Bostic said on Friday that he is less confident about the trajectory of inflation than he was in December, adding that he is now anticipating the Fed to lower the policy rate once this year. Bostic is scheduled to speak again on Monday, in addition to Chicago Fed President Austan Goolsbee and Fed Governor Lisa Cook.
GBP/USD Technical Analysis
The 200-day Simple Moving Average (SMA) aligns as a pivot point at 1.2600. If that level holds as resistance, sellers could look to retain control. On the downside, interim support seems to have formed at 1.2580 (static level) before 1.2550 (static level) and 1.2500 (psychological level, static level).
In case GBP/USD recovers above 1.2600 and confirms that level as support, 1.2640 (100-day SMA) and 1.2680 (200-period SMA on the 4-hour chart) could be seen as next hurdles.
