04 March 2024, GBP/USD
GBPUSD:
The Pound-Dollar pair is building on Friday's rebound from the important psychological level of 1.2600, or one-and-a-half-week low, and gained positive momentum for the second day in a row on Monday. During the Asian session, spot prices hit a multi-day peak around 1.2660-1.2665, helped by a combination of factors.
The British Pound (GBP) is receiving support from hawkish remarks from Bank of England (BoE) Chief Economist Hugh Pill on Friday, who said that the first cut in the key interest rate is not imminent. The US Dollar (USD), on the other hand, remains subdued amid disappointing US macroeconomic data on Friday and less hawkish remarks from Federal Reserve (Fed) officials. In addition, the recent rally in favor of risk in global equity markets further undermines the safe-haven US Dollar (USD), which in turn provides some support to the GBP/USD pair.
Nevertheless, downside opportunities for the USD look limited amid growing confidence that the Federal Reserve will keep interest rates higher. Traders may also refrain from aggressively targeting rates ahead of important US economic releases this week, including the closely watched Non-Farm Payrolls (NFP) data on Friday and Fed Chairman Jerome Powell's semi-annual testimony to Congress on Wednesday and Thursday. This, in turn, prompts some caution before positioning for further GBPUSD strengthening in the near term.
Trading recommendation: Watch the level of 1.2680, take Buy orders if the pair strengthens
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