GBP/USD finds bottom ahead of key Fed rate call

• GBP/USD rebounded on Tuesday, trimming losses after a technical bounce near 1.3300.
• A lack of UK data leaves US releases at the top of the pile.
• US GDP, PCE inflation, and NFP jobs reports will make for a heavy week.

GBP/USD found some balance on Tuesday, pumping the brakes on an extended backslide but falling just short of snapping its losing streak. The Cable pair caught an intraday technical rebound near the 1.3300 handle, and FX markets are coiling ahead of the Federal Reserve's (Fed) latest interest rate decision, due on Wednesday.

There remains little of note on the economic calendar for the United Kingdom (UK) side, leaving Cable traders to grapple with a hefty dose of US data releases through the remainder of the trading week.

The Fed's latest interest rate decision is slated for Wednesday and is expected to draw plenty of investor attention. The US central bank is broadly expected to keep interest rates on hold in the 4.25-4.5% range this week, but traders will be looking for signs that the Fed is still on track to deliver a fresh quarter-point rate trim at its next meeting on September 17.

Triple-threat US data docket on the radar this week

Besides an interest rate call from the most powerful central bank in the world, investors will also be contending with a US GDP update early Wednesday. Quarterly US GDP growth last clocked in at a disappointing -0.5% in Q1, and markets are hoping for a sharp recovery to 2.4% in annualized growth in Q2.

US PCE inflation, due on Thursday, is expected to accelerate slightly, with analysts anticipating an uptick to 0.3% MoM in June compared to the previous month's 0.2%. A resurgence of inflationary pressure is the last thing investors want, as it could spell doom for ongoing rate cut expectations.

Friday's NFP jobs report could add further fuel to rate hold fears. July's NFP net employment gains report is expected to hold in positive territory after seasonal adjustments. However, the figure is expected to ease to 110K from June's 147K.

GBP/USD price forecast

Tuesday's mid-day turnaround in Cable bidding could mark the end of the pair's near-term losing streak. 1.3300 has been marked in as an interim technical support level, and GBP/USD bidders will be looking to claw back territory north of the 50-day Exponential Moving Average (EMA) and the 1.3500 major price handle.

GBP/USD daily chart