The GBP/USD currency pair is trading close to an 11-month high, with its eyes on the Federal Reserve and US Non-Farm Payrolls (NFP) report. The Cable pair has risen for two consecutive weeks and is hovering around 1.2570, defending the previous day’s multi-day high.
Factors contributing to the Cable pair’s rise include positive Brexit news related to easy travel to and from Europe during the holiday season. Furthermore, upbeat inflation clues from private surveys and hopes of higher Bank of England (BoE) rates, as well as an absence of the banking crisis in the UK, have favored the GBP/USD buyers. The British business sentiment also surged to an 11-month high of 33.0% in March, with a seven-month high in wage growth, indicating a push for BoE rates.
On the other hand, the US Dollar bulls have been challenged by looming fears of the US debt ceiling expiration, banking fears from the First Republic Bank, and recession woes, even if the greenback posted a weekly gain backed by upbeat US data and hawkish Fed bets. The US GDP Annualized eased to 1.1% from 2.0% expected, and the Core Personal Consumption Expenditure (PCE) Price Index rose to 4.6% YoY, indicating the Fed’s preferred inflation gauge.
The market volatility could be fueled by a slew of top-tier US data and events, including the Federal Reserve’s monetary policy meeting and the US jobs report for April. However, the holidays at a few markets on Monday and the lack of major data in the UK may allow the GBP/USD to take a breather.
From a technical standpoint, the GBP/USD buyers have aimed for the May 2022 peak surrounding 1.2665, following a clear upside break of an upward-sloping resistance line from late April. Immediate support is now near 1.2555.