GBP/USD continues undulation in 1.3500-1.3550 ranges ahead of Fed/BoE speak and key UK/US data
|- GBP/USD consolidating within a 1.3500-1.3550 intra-day range ahead of busy week for central bank speak, US/UK data.
- Ahead of risk events, the pair may continue undulations in the 1.3500-1.3600 range, around key 2022 fib level.
GBP/USD is trading broadly flat at the start of the week within a 1.3500-1.3550 intra-day range, as traders brace for a barrage of further central bank speakers as well as UK and US tier one data releases. After rallying as high as the 1.3620s last week as a result of a weakening US dollar plus a hawkish BoE surprise, the pair reversed back below 1.3550 in the wake of a much stronger than expected US labour market report. January’s jobs data has pumped expectations for a 50 bps first rate hike from the Fed in March, overshadowing calls from a large minority of BoE members for a 50 bps move last week.
Fed tightening bets, which supported the dollar last Friday, may get pumped once again if Thursday’s US Consumer Price Inflation report also comes in hotter than expected. Fed policymakers speaking this week should be monitored just in case there is any push back against recent hawkish market moves. That could help drive GBP/USD back towards last week's highs above 1.3600. Otherwise, GBP/USD traders will be monitoring a speech from BoE Governor Andrew Bailey on Thursday ahead of the release of Q4 2021 GDP growth figures and December activity data on Friday.
Technical levels of note include the 1.3550 mark, which is the 50% retracement back from the 2022 highs at 1.3750 and the lows at just above 1.3350. As markets weigh Fed/BoE tightening themes, the pair may continue to undulate in the 1.3500-1.3600 area in the coming days. One theme worth keeping an eye on is Boris Johnson’s ongoing will he/won’t he stay on as UK PM saga, as the PM continues to face massive pressure in the wake of a string of recent scandals. Most analysts continue not to see sterling as being impacted too much by a Johnson departure given the candidates most likely to replace him are unlikely to herald much in the way of economic policy change.
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