Photo by Colin Watts on Unsplash 
 

• GBP/USD adds to the recent recovery past the 1.3500 level.
• The US Dollar starts the week on the back foot, falling to multi-week lows.
• US markets are closed on Monday due to the Labor Day holiday.

The British Pound rapidly shrugs off Friday’s hiccup and manages to regain composure on Monday, lifting GBP/USD past 1.3500 the figure in a context dominated by the widespread selling bias in the Greenback.
 

GBP/USD focuses on 1.3600

The resurgence of the buying interest in Cable comes in response to extra weakness in the Greenback, which drags the US Dollar Index (DXY) to levels last seen in late July, below the 98.00 support.

Meanwhile, investors are expected to gear up for quite an interesting week on the US calendar, where the US labour market is expected to take centre stage amid steady speculation of a couple of interest rate cuts by the Federal Reserve in the latter part of the year.

Domestically, investors largely anticipate the BoE to leave its policy rate unchanged at its September 18 gathering, while implied rates see nearly 25 basis points of easing by March 2026.

In the meantime, market participants should maintain their watchful stance on the UK fiscal scenario, while Treasury Committee members will meet the BoE’s rate-setters later this week, hoping to pick up clues on when cuts might come or whether there could be tweaks to the bank’s quantitative tightening plans.
 

Whats on the UK calendar

Across the Channel, Nationwide Housing Prices contracted by 0.1% in August, Mortgage Approvals rose to 65.35K in July, and the BoE’s M4 Money Supply expanded by 0.1% in July from a month earlier. In addition, the final S&P Global Manufacturing PMI came in at 47.0 in August.
 

Technical landscape

If GBP/USD breaks above the August high at 1.3594 (August 14), it could clear the path toward the 2025 ceiling at 1.3788 (July 1). Beyond that, the next resistance is the October 2021 peak at 1.3834 (October 20). 

On the flip side, first support comes in at the weekly low of 1.3390 (August 22), followed by the August floor at 1.3141 (August 1) and the May base at 1.3139 (May 12) just below.

More By This Author: