**GBP/USD Price Forecast: Sterling Balances at 1.35 Ahead of Fed, Jobs Data**
*By TradingNews.com Staff Writer*
The GBP/USD currency pair is exhibiting a cautious narrative as traders and investors brace for a critical round of economic data and policy decisions. With the Sterling hovering near the psychological 1.3500 threshold against the US dollar, forex markets are poised to react to both the upcoming Federal Reserve meeting and the highly anticipated US jobs report. This comprehensive outlook examines the recent dynamics in GBP/USD, key chart levels, potential catalysts, and what traders should watch as the landscape around Sterling shifts in early 2024.
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### Current GBP/USD Landscape
As the week unfolds, GBP/USD steadies near the 1.35 mark after a turbulent few sessions. Forces acting on the pair include mixed macroeconomic signals from both the United Kingdom and the US, as well as shifts in risk sentiment influenced by geopolitical and policy uncertainty. UK economic data has painted a modestly positive picture, but caution remains with the broader backdrop of slowing global growth.
**Key dynamics shaping GBP/USD include:**
– Rising interest rate expectations in the US, compelling dollar strength
– Surging US treasury yields, which enhance dollar appeal
– Moderate resilience in UK economic data, supporting the pound
– Market unease ahead of the Federal Open Market Committee (FOMC) rate decision
– Anticipation around the US nonfarm payrolls data
The result is a currency pair in balance, with traders wary of taking aggressive positions ahead of potential volatility from key US economic releases.
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### Recent Performance and Technical Context
GBP/USD entered the week battling resistance near 1.3550, subsequently retreating as the dollar regained some momentum. The pair has shown resilience above 1.3450, with dip-buying interest supporting prices despite near-term volatility.
**Technical takeaways:**
– The broader trend since late 2023 has favored Sterling, as UK inflationary concerns have faded while the Bank of England has signaled a more patient policy stance.
– The 1.3500 level stands as a psychological hurdle, with both bulls and bears reluctant to break it convincingly ahead of event risk.
– Major moving averages (50-day and 200-day EMA) are converging in the 1.3480 to 1.3530 range, highlighting key support and resistance zones.
– Relative Strength Index (RSI) is hovering near neutral levels, suggesting neither overbought nor oversold conditions at present.
The pair’s recent price action reflects underlying indecision with traders hedging bets ahead of key catalysts.
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### Fundamental Drivers to Watch
The week is packed with data and policy events likely to dictate GBP/USD’s direction. Central bank decisions and labor market updates top the calendar.
#### 1. **Federal Reserve Policy Decision**
The FOMC meeting represents a crucial inflection point. Markets are largely pricing in a hold on rates, but all eyes are on the accompanying statement and Fed Chair Jerome Powell’s press conference. Key points of focus:
– Updates on the Fed’s inflation and growth outlook
– Tone surrounding future rate hikes or potential pauses
– Balance sheet commentary and asset purchase tapering developments
Should the Fed strike a notably hawkish tone or hint at more aggressive tightening, the US dollar could see renewed buying interest, weighing on GBP/USD. Conversely, dovish surprise or caution from Powell may offer Sterling a window to advance above 1.35.
#### 2. **US Nonfarm Payrolls Report**
Scheduled shortly after the FOMC, the US jobs report is expected to show a slower pace of employment growth, although the labor market remains relatively healthy. Stronger-than-expected payrolls or wage data would reinforce the Fed’s case for higher rates and potentially boost the dollar. Disappointing numbers, on the other hand, might weigh on the dollar and lift GBP/USD.
Traders are watching not just the headline jobs
Read more on GBP/USD trading.