GBP/USD grapples with 1.34 as markets weigh data outlook

• GBP/USD churned just below the 1.3400 handle on Monday.
• BoE policy hearings and US NFP data loom over the horizon.
• Fed talking points trim hopes for double rate cut in November.

GBP/USD cycled just south of the 1.3400 handle to kick off the new trading week, but intraday price action flubbed the key price level, closing back below the round figure barrier after cautionary statements from Federal Reserve (Fed) Chair Jerome Powell trimmed rate cut expectations and bolstered the Greenback.

High-impact data is limited for GBP traders this week, but Cable bidders will be keeping an eye out for the Bank of England’s (BoE) Monetary Policy Report Hearings due early Thursday. On the US side, markets will be broadly pivoting into watching the runup to Friday’s US Nonfarm Payrolls report for September.

Fed officials hit the wires on Monday, with Atlanta Fed President Raphael Bostic drawing a line in the sand on the jobs market and tipping his hand to investors for what they should expect in regards to further rate cuts when it comes to data. The Fed’s Bostic noted that NFP jobs prints below 100K would be a magic number that might trigger further steep action from the Fed.

Fed head Jerome Powell followed up Atlanta Fed President Bostic, noting that investors shouldn’t expect any more outsized rate cuts unless a significant downturn in US economic data rears its a head, a proposition that sent the Greenback higher and rate traders trimming their expectations for a 50 bps rate cut in November. Fed Chair Powell openly telegraphed to investors that after September’s opening volley of a jumbo rate cut, the Fed is likely on pace to only deliver another two 25 bps rate trims heading into next year.

GBP/USD price forecast

With bulls struggling to drag Cable into fresh chart paper on the high side, GBP/USD is beginning to flash warning signs that the pair is overdue for a bearish pullback. Cable has gained around 3.3% from the last swing low into the 1.3000 handle barely two weeks ago.

Short interest will pile in for an initial drive back into the 50-day Exponential Moving Average (EMA) near 1.3100.

GBP/USD daily chart