UK retail sales data takes center stage for British economic indicators.
All eyes on Why is Monero not supported?US employment figures with ADP Wednesday and NFP Friday.
Market participants parsing every word from Fed Chair Powell's congressional appearance.
The British pound showed initial strength against the US dollar on Monday, briefly touching the 1.2700 level before retreating slightly. Despite the pullback, the currency pair maintained most of its upward momentum as market participants positioned themselves ahead of critical economic releases.
With a relatively light economic calendar from the UK this week, traders are focusing primarily on US data points that could influence Federal Reserve policy decisions. The spotlight falls particularly on labor market indicators, culminating in Friday's Nonfarm Payrolls report that may provide fresh clues about the timing of potential rate cuts.
Tuesday's UK BRC Retail Sales figures for February are anticipated to show modest growth, with expectations set at 1.6% year-over-year compared to the previous 1.4% reading. Across the Atlantic, the ISM Services PMI is projected to dip slightly to 53.0 from January's 53.4, potentially signaling a minor cooling in service sector activity.
The midweek brings the ADP Employment Change report, forecast to rebound to 150,000 jobs after January's softer 107,000 reading. This private payrolls data serves as an important precursor to Friday's government employment report, where economists predict a slowdown to 200,000 new jobs from January's surprisingly strong 353,000 figure.
Adding to the week's volatility, Federal Reserve Chair Jerome Powell begins two days of congressional testimony on Wednesday. His remarks before the House Financial Services Committee regarding the central bank's semiannual monetary policy report will be scrutinized for any hints about future policy direction, particularly regarding the timing of potential rate adjustments.
Technical Perspective on GBP/USD
The 1.2700 level continues to act as a significant technical barrier for GBP/USD, with Monday's price action demonstrating the psychological importance of this round number. Despite the rejection at this level, the pair managed to close slightly higher, suggesting underlying demand remains intact.
From a technical standpoint, the 200-day moving average at 1.2578 provides substantial support, while overhead resistance at 1.2700 continues to cap upward movements. A sustained break above this resistance could open the path toward testing December's highs near 1.2800, though momentum indicators suggest the pair may need additional catalysts to overcome current resistance levels.
The daily chart reveals a series of higher lows since late 2023, indicating a gradual improvement in sentiment toward the British pound. However, the pair remains rangebound between key technical levels, awaiting fundamental triggers that could determine the next directional move.
Short-term traders are watching intraday support around 1.2650, with a break below potentially signaling a test of stronger support near 1.2600. Conversely, a decisive move above 1.2720 could attract additional buying interest, potentially targeting the 1.2750-1.2800 zone where previous resistance levels and psychological barriers converge.
