Important events today:

08:30 UTC: USD – Composite PMI Index.

13:45 UTC: USD – Composite PMI Index.

On Tuesday, the GBP/USD pair fell by one-fifth of a percent as traders prepared for a busy midweek market session after a quiet start. S&P Purchasing Managers’ Index (PMI) data are due to be released on both sides of the Atlantic, and additional key U.S. data will be published during the second half of the trading week.

UK PMI data will kick off the London session on Wednesday, with investors generally expecting a recovery in the UK’s services PMI for July. In June, the UK’s services PMI fell to a seven-month low of 52.1, and average market forecasts expect a recovery to 52.5.

In the U.S., the July services PMI is expected to decline slightly to 54.4 from June’s figure of 55.3. Global markets broadly anticipate a rate cut by the Federal Reserve in September, and investors are looking for further signs of weakening U.S. economic indicators to support the rate outlook. Traders are pricing in nearly a 100% probability that the Federal Open Market Committee (FOMC) will cut rates by at least a quarter point at its meeting on September 18.

U.S. GDP data for the second quarter will be released on Thursday, followed by the PCE inflation index on Friday. The annual U.S. GDP figure for the second quarter is forecasted to rise to 1.9% from 1.4%, while core PCE inflation is expected to further decrease on an annual basis to 2.5% for the year ending in June, compared to 2.6% in the previous month.

Recommendations: Watch the 1.2900 level; if the price holds above it, consider taking long positions (Buy), and if it bounces back, consider taking short positions (Sell).