GBP/USD looks for an extended pickup from latest downturn

• GBP/USD drifts higher on Monday amidst a thin early-week economic calendar.
• UK GDP data due at the end of the week, strictly mid-tier releases on offer until then.
• Fed news cycle to dominate market attention as policymakers caution restraint.

GBP/USD ground out some bullish chart paper on Monday, climbing from a recent swing low into 1.2650 as markets kicked off the new trading week with risk appetite firmly on the front foot. Key economic data remains limited through most of the week, with Cable traders set to look ahead to high-impact calendar releases that won’t land until later. Gross Domestic Product (GDP) updates for the US and the UK are due in the back half of the trading week, with US Personal Consumption Expenditure (PCE) Price Index inflation numbers slated for Friday.

Fed's Daly: Inflation is not the only risk, but recent inflation readings are more encouraging

Fed's Goolsbee: Slowing inflation data would open door to easier policy

Tuesday's release schedule is strictly mid-tier, leaving markets to churn on statements from central bank policymakers. A smattering of Fedspeak comments sent minor jitters through Monday's markets, with more of the same expected on Tuesday.

Federal Reserve Bank of San Francisco President Mary Daly noted on Monday that 2024’s inflation prints have not inspired much confidence when viewed in the aggregate, though recent prints have shown promise. Fed policymaker Daly’s comments followed on the heels of earlier comments from Federal Reserve Bank of Chicago President Austan Goolsbee, who remains optimistic that further progress on inflation will be forthcoming, noting that the Fed’s policy stance remains appropriately restrictive.

GBP/USD technical outlook

The Cable’s Monday bull run drove the pair up six-tenths of one percent bottom-to-top from last Friday’s bottom bids at 1.2622. Hourly candles have tipped into technical resistance at the 200-hour Exponential Moving Average (EMA) at 1.2695, which could be a bump in the road for bullish momentum.

Daily candlesticks are churning in neutral territory just north of the 200-day EMA at 1.2603, and further downside could be on the cards as intraday bids get hung up on the 50-day EMA at 1.2673.

GBP/USD hourly chart

GBP/USD daily chart