Key events today:

14:00 UTC: USD – ISM Services Sector Business Activity Index.

16:10 UTC: USD – Federal Reserve Chairman Jerome Powell is set to give a speech.

GBPUSD remains vulnerable due to slowing inflation in the UK and gloomy market sentiment. Traders will closely watch the Fed’s speech on Wednesday, as it may provide some hints on the interest rate trajectory and policy outlook.

On Tuesday, several Fed officials spoke about monetary policy prospects. Cleveland Fed President Loretta Mester stated she still expects interest rates to be lowered this year, but ruled out the possibility of a cut at the next meeting in May. San Francisco Fed President Mary Daly also anticipates rate cuts this year, but only after new evidence shows that inflation has cooled down. She mentioned that three rate cuts this year would be a ‘very reasonable baseline,’ although nothing is guaranteed. According to the CME FedWatch Tool, investors now see a 65% chance of a rate cut by June, compared to about 70% following the Fed’s meeting in March.

In February, JOLTS data on job openings in the US rose to 8.756 million from a downwardly revised 8.748 million in January, better than market estimates. Meanwhile, factory order volume improved to 1.4% month-on-month in February after a 3.8% decline in the previous reading. Traders are increasing bets that the Bank of England (BoE) will cut interest rates before the Federal Reserve in the US this year, which is putting pressure on the British Pound (GBP). Additionally, weakening inflation in the UK and gloomy market sentiments may pressure the Pound Sterling and limit the GBP/USD pair’s growth.

Recommendations: Predominantly trade with sell orders from the current price level.