The GBPUSD pair has been flexing muscles for quite a while now, refusing to go down just yet despite continuously mounting expectations for a new bearish correction. The reasons for the pound's strength are complex - from post-Brexit optimism to strong global demand for riskier securities. This rally is poised to cave in eventually and given this week's busy schedule, this could happen in the very near future.
First, the Monetary Policy Committee (MPC) of Bank of England is scheduled to meet on Thursday. According to the preliminary market forecasts, the Committee is unlikely to scale up its underlying asset purchase facility, which means that the pound will most probably not be strengthened by any monetary policy alterations at the present rate.
Secondly, the U.S. Bureau of Labour Statistics is next in line to release January's Non-Farm Payrolls data on Friday. Even though headline unemployment is anticipated to remain unchanged from a month prior, the U.S. labour market is still expected to have added 55 thousand new jobs in the first month of the year.
Overall, there are more reasons to weigh in on a dollar recuperation/sterling depreciation over the next several days, as the pair continues to test a major resistance level. These fundamental factors could catalyse such a long-awaited bearish correction, creating some very interesting trading opportunities.
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