**GBP/USD Price Forecast: Sterling Balances at 1.35 Ahead of Fed, Jobs Data**
*By TradingNews.com Staff. Credit to TradingNews.com for the original analysis.*
—
The British pound (GBP) is holding steady around the critical 1.3500 level against the US dollar (USD) as markets brace for a pivotal week packed with high-impact data releases and central bank statements. After several sessions of choppy price action, GBP/USD finds itself at a crossroads, with both technical and fundamental drivers on the horizon set to influence the pair’s next major move.
In this detailed forecast, we will examine:
– The recent performance of GBP/USD and key chart levels
– Fundamental factors influencing sterling and the dollar
– Market sentiment ahead of forthcoming US Federal Reserve (Fed) and UK data
– Near-term price projections and scenarios for traders to monitor
—
**GBP/USD: Recent Price Action and Technical Overview**
GBP/USD has seen pronounced volatility in recent sessions, oscillating in a relatively narrow range centered on the pivotal 1.3500 handle. The pair has struggled to break decisively higher, with successive attempts faltering near the 1.3550 to 1.3570 resistance zone. On the downside, dips have been well supported in the 1.3450 region, creating a consolidation pattern that traders are closely monitoring for signs of breakout.
*Key Technical Levels:*
– **Support:** 1.3500 (psychological/lateral support), followed by 1.3450 (recent lows), and 1.3400 (deeper support)
– **Resistance:** 1.3550-1.3570 (recent highs), 1.3600 (round number resistance), and 1.3650 (prior swing highs)
– Recent price action shows inability to sustain above the 100-day simple moving average
– Relative Strength Index (RSI) hovering near 50, indicating a balanced momentum profile
*Candlestick Patterns and Chart Structures:*
– Frequent doji and small-bodied candles reflect indecision in the market, typical of a pre-event environment
– A breakout from the current consolidation pattern is likely to initiate increased volume and momentum
—
**Fundamental Drivers: Sterling Supported but Facing Crosscurrents**
The pound has displayed resilience in recent weeks, bolstered by a mix of improved domestic data, relative optimism about the UK economic outlook, and diminished Brexit-related anxieties. Yet the broader landscape remains clouded by several key factors that could tip the balance either way.
*Sterling’s Fundamental Backdrop:*
– **Stronger UK Data:** Recent readings in retail sales and PMI surveys have come in above expectations, suggesting continued robustness in Britain’s recovery from pandemic lows.
– **Bank of England (BoE):** The BoE has stuck to its modestly hawkish rhetoric, with some policymakers hinting at possible tightening should data remain supportive. However, the central bank’s desire to monitor incoming numbers before shifting rates has prevented markets from pricing in aggressive hikes.
– **Inflation Trends:** Headline inflation in the UK remains above the central bank’s target, but early signs suggest that price pressures are beginning to moderate. This dynamic leaves the BoE in wait-and-see mode and the market cautious.
*Crosswinds from Abroad:*
– **US Dollar Strength:** The greenback continues to benefit from persistent expectations that the Fed will maintain its tightening bias amid a resilient labor market and sticky inflation. Even as some data have signaled a modest cooling, traders appear unwilling to abandon bets on further hikes just yet.
– **Risk Appetite:** Global equity market volatility has intermittently lifted the safe-haven dollar, although pullbacks in risk aversion have enabled cyclical currencies like the pound and euro to stabilize.
—
**Upcoming Event Risks: All Eyes on US Jobs Data and Fed Event**
This week marks a major test for both the pound and the dollar, as market participants brace for a raft
Read more on GBP/USD trading.