GBP/USD sways pre-BoE & Fed events, as Goldman Sachs ups forecasts; eyes on inflation & Fed's stance. Key levels: 1.2600 bearish, 1.2885 bullish, amid varying central bank actions.

• Ahead of important events and data, the GBP/USD currency pair is under selling pressure.
• This pushed it to the support level of 1.2667 yesterday before stabilizing around 1.2720 at the time of writing the analysis.  

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Despite the performance of the pound sterling, Goldman Sachs has raised its forecast for the pound against the US dollar. In this regard, the title "Reputation of the pound sterling" appeared in a new report issued by Goldman Sachs, in which it announces raising its expectations for the exchange rate of the pound against the dollar. The memo states: "The pound sterling has been the best performer in the G10 since the beginning of the year, benefiting from the recent positive cyclical repricing in the markets. We still believe that the pound sterling has room to rise." 

Also, Wall Street analysts say that the pound sterling has benefited from slightly more flexible global financial conditions and better growth rates. If these conditions continue, the gains could extend. Ultimately, the memo comes the same week that the Bank of England presents its latest policy decisions and guidance, and Goldman Sachs analysts add that they do not expect any major policy changes. 

Instead, the risks in the near term for the pound will come from other global central banks: "With investor focus in the foreign exchange market on the Japanese yen and the Swiss franc, we expect the Bank of Japan and the Swiss National Bank to attract more attention compared to the Bank of England this week, in addition to the new expectations for the US Federal Reserve. A more hawkish message from the Federal Reserve could risk damaging the latest outlook. Rising growth rates have led to some underperformance of the pound sterling in recent times." 

However, if the current supportive global backdrop continues, Goldman Sachs expects the British pound to remain supported in the future. With the pound sterling now trading around the investment bank's initial target, it raises its expectations to 1.30, 1.33, and 1.35 in 3, 6, and 12 months (from 1.28, 1.30, and 1.35 previously). 

GBPUSD Expectations and Analysis Today: 

The British inflation figures and the path of the US Federal Reserve's policy will determine the reaction for the future of the GBP/USD exchange rate for the remainder of this week and even for the next week. So far, based on the performance on the daily chart, the GBP/USD pair is undergoing a downward correction, and breaking the crucial support at 1.2600 could change the outlook to bearish. This could happen if the British inflation figures weaken, and the tone of the US Federal Reserve's policy statement is more hawkish. In fact, a stronger downward momentum could occur from this level. Currently, the nearest support levels for the trend are 1.2655, 1.2580, and 1.2500, respectively. On the other hand, during the same time period, movement towards the resistance level of 1.2885 is possible if the British inflation figures come out stronger and the tone of the US Federal Reserve is less hawkish than expected. 

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