After Friday’s comeback, the GBP/USD currency pair started the week without a clear direction. The pair has been consolidating above 1.2000, and the short-term technical view suggests this will continue.

In February, the US ISM Services PMI survey showed that the service sector was doing a lot of business and that input prices were increasing significantly. During the US session, these data helped the US Dollar find some buyers, but the good mood on the market kept it from getting stronger.

In its half-yearly Monetary Policy Report, released Friday, the US Federal Reserve said that policy rate hikes are necessary. FOMC Chairman Jerome Powell will give this report to the Senate Banking Committee and the House Financial Services Committee on Tuesday and Wednesday. He will also answer questions from those committees.

Before Powell’s hearing, people in the market may sit on the sidelines and let their feelings about risk determine their actions.
In early European trading, the UK’s FTSE 100 Index is down a little, and American stock index futures are all over the place. GBP/USD may be hard to move if market sentiment doesn’t change.

Trade Idea

Investors will watch what happens with Brexit. In a recent study, ING analysts said they think the new EU-UK deal won’t have much of an effect on the value of the Pound Sterling. Instead, they think the global risk climate and differences in interest rates between the UK and other major countries will.