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• GBP/USD fell just shy of reclaiming the 1.3000 handle on Monday.
• UK and US PMIs slated for Thursday this week.
• Jackson Hole Economic Symposium kickoff looms ahead.

GBP/USD rose one-third of one percent after the US Dollar continued to recede to kick off the new trading week. Greenback flows extended a near-term course reversal as investors shrug off a recent downswing in market sentiment. A rough patch of bad US data reignited investor fears of an impending US recession, but a late upswing in recent US data prints have soothed investor nerves, who have to returned to waiting for signs of rate cuts from the Federal Reserve (Fed).

The midweek stretch is a quiet affair as markets await key data on Thursday as well as the kickoff of this year’s Jackson Hole Economic Symposium. All three are expected to land on markets beginning on Thursday.

UK Purchasing Managers Index (PMI) figures are expected to hold on the high side in August. UK MoM Manufacturing PMI numbers are expected to hold steady at 52.1, while the Services PMI component is forecast to tick upwards to 52.8 from 52.5 over the same period.

Across the Atlantic, US PMI figures are expected to soften on Thursday. US Manufacturing PMI in August is expected to tick down slightly to 49.5 from 49.6, while US Services PMI numbers are forecast to fall an entire point to 54.0 from 55.0.

The Jackson Hole Economic Symposium, slated to kick off a multi-day central banker extravaganza on Thursday, will have investors across the globe tuning in for any signals from Fed policymakers about the likelihood of a Fed rate cut in September.

Recent bets of a double cut in September have eased significantly after reaching a peak of 70% two weeks ago. According to the CME’s FedWatch Tool, rate markets are pricing in a scant one-in-five chance of a 50 bps cut on September 18. Overall, markets still have a 25 bps cut in September fully priced in, with three or four quarter-point cuts expected by the end of the year.

GBP/USD price forecast
 

Despite a firm extension of bullish momentum on Monday, GBP/USD bidders were unable to recapture the 1.3000 major price handle, hanging price action out to dry at key resistance levels on the tail end of a one-sided momentum play. Near-term momentum traders will be looking for an opportunity to jump short, targeting a decline back into the 50-day Exponential Moving Average (EMA) near 1.2800.

GBP/USD daily chart
 

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