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02.06.2025 06:26 PM
The GBP/USD pair is regaining positive momentum at the start of the new week, rebounding on renewed U.S. dollar selling and breaking above the psychological 1.3500 level.
Friday's U.S. Personal Consumption Expenditures (PCE) Price Index showed further weakening of inflationary pressures in the country, strengthening arguments for the Federal Reserve to ease its monetary policy. Additionally, concerns about the worsening U.S. fiscal position, driven by the passage of President Donald Trump's "Big Beautiful Bill," are adding downward pressure on the dollar.
On the other hand, the British pound is showing relatively strong performance amid expectations that the Bank of England will pause interest rate cuts at its next meeting on June 18, which also supports the GBP/USD pair. However, a weaker risk tone may limit the dollar's losses, thereby putting some pressure on the pair.
Global risk sentiment has deteriorated following Trump's statement that China does not intend to comply with the terms of the trade agreement reached in Switzerland. This adds to persistent geopolitical risks related to conflicts between Russia and Ukraine, as well as in the Middle East, curbing investors' appetite for riskier assets and supporting the dollar.
For better trading opportunities, attention should be paid to the upcoming important U.S. macroeconomic releases, starting with the ISM Manufacturing PMI scheduled for Monday, as well as the speech by Federal Reserve Chair Jerome Powell, which will influence the dollar's movements and provide a certain momentum for GBP/USD.
From a technical perspective, oscillators on the daily chart remain in positive territory and far from oversold conditions, suggesting that the path of least resistance for the pair remains upward.
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