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Why Is GBP/USD Stuck Below 1.2700? Key Factors Traders Need to Watch

The How high will Cardano go in 2025?GBP/USD currency pair continues to trade below the psychologically significant 1.2700 level during Wednesday's Asian session, currently hovering around 1.2695 with a modest 0.08% decline. This movement reflects renewed strength in the US Dollar as market participants position themselves ahead of several high-impact events.Several fundamental factors are influencing this currency pair:1. **US Economic Indicators**: The latest ISM Services PMI reading came in at 52.6 for February, slightly below expectations of 53.0 and down from January's 53.4. This softer data point has created some uncertainty about the strength of the US economy.2. **Fed Policy Expectations**: Atlanta Fed President Raphael Bostic recently suggested the central bank might implement its first rate cut in Q3 2024, potentially followed by a pause to assess economic impacts. Markets currently price just a 3% chance of a March rate cut according to CME FedWatch data.3. **UK Economic Outlook**: Chancellor Jeremy Hunt's Spring Budget included a 2p reduction in national insurance contributions. Meanwhile, market participants anticipate the Bank of England might begin its rate-cutting cycle in August when inflation is projected to temporarily hit the 2% target.Key events that could drive GBP/USD volatility include:- UK S&P Global Construction PMI data- Fed Chair Jerome Powell's semiannual Congressional testimony- Friday's crucial US Nonfarm Payrolls report (consensus: +200K jobs)Technical traders note that sustained trading below 1.2700 could signal further downside potential, while a break above this level might indicate renewed bullish momentum. Market participants are advised to monitor these developments closely as they could create significant trading opportunities in this major currency pair
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