GBP/USD bulls take charge in the open

• GBP/USD at risk of a dip to 1.1800 for the quarter ahead. 
• US dollar is picking up a safe haven bid despite a deteriorating economic outlook in the US. 

At 1.2115, GBP/USD is up on the day as the US dollar gives some of the territory made at the end of the week to the bears, elevating sterling ahead of the Tokyo open and main equities hour. The US dollar is caught between the balance of risk-off and concerns over the US economy.

US data, such as that on Friday in the weakening manufacturing indicators have dominated markets and equities are vulnerable to the evidence of the slowdown. This makes this week's US jobs data as a key feature on the calendar.

Nonfarm Payrolls is expected to show that Employment likely continued to advance firmly in June but at a more moderate pace after three consecutive job gains of around 400k in March-May, the analysts at TD Securities said. ''High-frequency data, including Homebase, still point to above-trend job creation. We also look for the UE rate to stay unchanged at 3.6% for a fourth straight month, and for wage growth to remain steady at 0.3% MoM (5.0% YoY).''

The minutes of the Federal Reserve's June meeting will also be eyed. ''Persistent high CPI inflation and nascent signs of de-anchoring inflation expectations forced the Fed to amp the pace of rate tightening. The meeting minutes are likely to offer further colour around the Fed's more hawkish reaction function,'' the analysts at TD Securities said. 

Meanwhile, across the pond, policies will be a driver as Tory rebels are plotting another vote to oust Boris Johnson this month. Opponents of the Prime Minister will try to overhaul 1922 Committee rules so that another leadership challenge can be triggered immediately. Elsewhere, analysts at Rabobank explained, arguably, that ''the challenges facing policymakers in the UK are among the most complex in the developed world.'' The analysts explained that the UK's inflation has not yet peaked, and labour market strife indicates that higher inflation expectations may be already entrenched.

''However, UK consumer confidence has plunged, and, more recently, measures of business sentiment have also started to dive. Additionally, if expectations regarding BoE policy moves do not keep step with the hawkish guidance of the Federal Reserve, it can be argued there is a risk that GBP could weaken further. Yet, GBP is also proving sensitive to fears regarding growth.'' The analysts see a risk of dips to GBP/USD1.18 on a 3-month view.