• At the end of last week's trading, the GBP/USD price tried to rebound higher, but its gains did not exceed the 1.2877 level and closed the week's trading stable around the 1.2863 level.
• Moreover, its losses extended in the same week to the 1.2847 support level, its lowest in two weeks.
• Amid this performance, financial markets have set a 45% probability for the Bank of England's first interest rate cut in more than four years, as inflation has returned to the Bank of England's 2% target.

Other important economic data to watch include the Eurozone business survey and unemployment rate, German unemployment data, and the Bank of England monetary indicators in the United Kingdom. 

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Also, this week in the US, the Federal Reserve is expected to keep the federal funds rate steady at 5.25%-5.50% for the eighth consecutive meeting, but all eyes will be on any indication of the US central bank’s plans for September, with a rate cut fully in mind. The US economy is likely to have added 185,000 jobs this month, down from 206,000 in June, while the unemployment rate is likely to remain at a 2021 high of 4.1% and wage growth at 0.3%. 

According to Forex trading, Credit Agricole commented; “The pound is starting to look expensive against both the euro and the US dollar when compared to short-term fair value estimates based on the relative attractiveness of the pound among other drivers. Accordingly, the pound also remains one of the largest long positions in the G10 forex market. In turn, this justifies some caution regarding the near-term outlook for the currency.” 

HSBC added, “With markets currently holding a very large net long position in sterling (IMM data), the risks are skewed to the downside.” 

This week, markets will focus on the Bank of England’s policy meeting. 

Bank of America commented; "We are sticking with our August call for now, largely because we have the impression that the Bank of England really wants to cut. Furthermore, this may mean that they will emphasize the (slow) decline in wage growth and the volatile services accommodation component in the services inflation surprise." However, the bank's conviction is waning. From a medium-term perspective, the bank commented; "If the central bank moves early when the data is not yet there, this also creates a risk not only of a shallower cutting cycle, but also shorter than we assume." 

Technical forecasts for the GBP/USD pair today:  

According to the performance on the daily chart below, the GBP/USD price is moving within a downward channel that will increase in strength with the break of the support levels 1.2800 and 1.2720 respectively. On the other hand, and for the same time period, the psychological resistance 1.3000 will remain the most important for the bulls' control over the trend. In general, the trend this week will be determined by the policy path of both the Bank of England and the US Federal Reserve, then the announcement of the US jobs numbers. 

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