Sterling rose on Monday with the help of rallying risk markets, though cable remained only slightly above its Feb.
7 low at 1.1962 as traders remain wary of big moves before U.S. and UK reports in the next two days that could leave a relatively neutral set up if the figures come out near market expectations.
Should both U.S. and UK prices dip as expected -- with UK price growth forecast to ease slightly to 10.3%, keeping well above the BoE's 2% target -- GBP/USD should remain anchored near current levels as the Fed and BoE are likely to continue hiking symmetrically giving.
Technically, the 10-day moving average has fallen below the 21-, 30- and 55-DMAs, hinting at a move lower in GBP/USD, with likely downside targets at the 200-DMA by 1.1945 and 100-DMA at 1.1861.
Recent GBP/USD gains have been capped by the 10-DMA at 1.2139, with the bullish structure likely advanced with a close above 1.2205, the 50% Fib of 1.2448-1.1962.
The prospects for GBP/USD going forward appear limited as the UK economy is alone within the G7 unable to revert to pre-pandemic levels as inflation, low growth, lingering Brexit issues and a high current account deficit weigh.
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