GBP/USD corkscrews near key averages as central bank speeches gather

• GBP/USD rose early on Monday, but failed to capture 1.2700 and fell back.
• A raft of speeches are due from both BoE and Fed speakers this week.
• Key US growth and inflation figures are due this week as inflation fears return.

GBP/USD churned on Monday, jumping to a fresh 10-week high before slumping back to the day's opening bids near 1.2630. Cable failed to recapture the 1.270 handle, and price action has fallen back beneath the 200-day Exponential Moving Average (EMA) near 1.2660.

A resurgence in US inflation figures late last week kicked off a fresh round of risk aversion. Investors will be focused squarely on upcoming US Personal Consumption Expenditure (PCE) inflation data due later this week. Traders hope that an early-year uptick in headline inflation data from the US will recede quickly and not solidify into another drawn-out battle with "transitory" inflation that runs too hot for the Federal Reserve (Fed) to deliver rate cuts.

Market participants hoping for an upswing in the pace of Fed rate cuts in 2025 have already been pushed to the ropes as US President Donald Trump tries to spark a global trade war, and a new surge in inflation will be the final nail in the coffin for rate cut hopes. President Trump reiterated his own threats of high tariffs on Canada and Mexico on Monday, warning that tariffs are still due to be enacted "next month" after caving on his own tariff pressures in recent weeks and granting a delay to nearly every country he's taunted with import taxes on his own citizens.

Not to be left in the dust, the Bank of England (BoE) has its own policymakers slated to make regular appearances this week, though their impact on global markets is likely to remain muted. The BoE has, thus far, largely matched market expectations on the rate cut front. The BoE's Huw Pill makes an appearance on Tuesday, followed by Swati Dinghra on Wednesday and Dave Ramsden on Friday.

GBP/USD price forecast

With price action backing into the 200-day EMA at 1.2660, middling performance poses a significant risk to any technical trend. GBP/USD has risen around 4.4% from its last major swing low to 1.2100 in mid-January, but bidding appears to have run out of gas.

The next immediate barrier to a fresh leg down will be the 50-day EMA at 1.2520, but bidders will no doubt be waiting in the wings to kick off a new push into the high side from the 1.2500 handle.

GBP/USD daily chart