**GBP/USD Weekly Outlook: June 10–14, 2024**
_Adapted and expanded from the original article by ActionForex.com_
**Overview**
The GBP/USD currency pair experienced volatile movements in the past week, reflecting broader global macroeconomic influences and diverging policy expectations from the Bank of England (BoE) and the US Federal Reserve (Fed). Investors scrutinized the interplay of economic data releases, central bank communications, and shifting market sentiment, all of which played a significant role in driving price dynamics.
In this comprehensive analysis, we delve into GBP/USD’s technical posture and underlying fundamentals, providing actionable insights for traders in the week ahead.
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## Weekly Performance Recap
**Price Action Review**
– GBP/USD opened the week trading near 1.2700 and fluctuated within a tight range initially.
– Early week momentum was somewhat muted due to cautious sentiment ahead of key data releases and central bank announcements.
– As the UK employment reports arrived, the data failed to deliver a clear catalyst for Sterling, leading to back-and-forth movements.
– Federal Reserve policy expectations shifted after the release of US inflation readings, compounding volatility.
– GBP/USD closed at approximately 1.2720, slightly higher on the week, reflecting ongoing uncertainty.
**Key Themes Driving the Pair**
– UK economic growth prospects remain mixed, with investors still wary about the timing and pace of possible BoE rate cuts.
– US labor market data showed resilience and a contained inflation profile, spurring speculation about future Fed policy moves.
– Ongoing global risk sentiment and geopolitical developments provided an undercurrent of volatility.
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## Fundamental Drivers
### UK Macro Backdrop
– **Economic Growth:**
– Recent GDP and PMI data suggested the UK economy is stabilizing but lacks significant momentum.
– Growth remains below historical averages, weighed down by subdued consumer and business confidence.
– **Inflation Dynamics:**
– UK inflation, although off its recent highs, has proven stickier than some major peers.
– Services inflation remains persistent, complicating the BoE’s policy calculus.
– **Labor Market:**
– Wage growth stayed robust, fueling concerns about a secondary round of inflation.
– Headline employment figures moderated, hinting at a slow cooling of labor demand.
### Bank of England Policy Outlook
– BoE officials continue to indicate caution about premature easing, keen to see sustained disinflation before cutting rates.
– Market pricing for BoE rate cuts shifted modestly, with investors now anticipating the first reduction potentially in late summer or early autumn.
– The May policy meeting minutes reflected internal divisions, with some members expressing willingness to move more quickly if inflation data permits.
### US Economic Landscape
– The US economy maintained stable growth, anchored by robust consumer activity and labor market strength.
– Inflation trends showed further moderation, bolstering market expectations for several Fed rate cuts by year-end.
– However, members of the Federal Open Market Committee (FOMC) continued to stress the need for “greater confidence” that inflation is on a sustained downward path before easing policy.
### Fed Policy Expectations
– The odds of a rate cut in the next few months increased following relatively soft jobs and inflation data.
– US dollar strength was tempered by lingering doubts about the timing and scope of Fed easing, contributing to GBP/USD’s resilience.
– Yields on shorter-term Treasuries fell, narrowing the rate differential between UK and US government bonds.
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## GBP/USD Technical Analysis
### Weekly Chart Perspective
– The GBP/USD pair’s recovery lost some momentum after reaching a high around 1.2826.
– Price action suggests a possible near-term top, with softening up-moves in the most recent sessions.
– Weekly Relative Strength Index (RSI) and momentum oscillators point to loss of upward impetus, raising risks of a corrective pullback.
### Daily Chart and Key Levels
**Immediate Support:**
– 1.2650 represents pivotal
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