GBP/USD bulls attack 11-month top below 1.2600 with eyes on Fed, US NFP

• GBP/USD seesaws at multi-month high after two-week uptrend.
• Upbeat US data underpinned hawkish Fed bets and US Dollar.
• Brexit positive news, hawkish hopes from BoE favor and technical technical breakout help Cable pair buyers.
• Fed monetary policy meeting, US jobs report for April will be crucial to watch for fresh impulse.

GBP/USD grinds near the highest levels since June 2022, after rising in the last two consecutive weeks, as traders kick-start the key week comprising multiple central bank meetings including from the Federal Reserve and the US jobs report. That said, the Cable pair makes rounds to 1.2570 while defending the previous day’s run-up near the multi-day high during early Monday in Asia.

Hopes of getting another positive from the Brexit front, this time in the form of an easy travel to and from Europe during the holiday season, initially underpinned the GBP/USD pair’s run-up in the last week. The reason could be linked to UK Prime Minister Rishi Sunak’s push for the rules that can help cheer the vacation after the much-awaited Brexit deal is sealed.

Further, upbeat inflation clues from private surveys and hopes of higher Bank of England (BoE) rates, as well as an absence of the banking crisis in the UK, also likely to have favored the GBP/USD buyers. On Friday, a jump in the UK business confidence, per the Lloyds Bank survey for March also seemed to have propelled the quote. As per the latest poll, the British Business Sentiment rallied to an 11-month high of 33.0% in March versus 32.0% prior. Additionally, the survey also showed a seven-month high in wage growth, which in turn can push the BoE

On the other hand, looming fears of the US debt ceiling expiration, banking fears emanating from the First Republic Bank and recession woes challenged the US Dollar bulls even if the greenback managed to post a weekly gain backed by upbeat US data and hawkish Fed bets.

In the last week, the first readings of the US Gross Domestic Product (GDP) for the first quarter (Q1) of 2023, also known as Advance readings, marked mixed outcomes. That said, the headline US GDP Annualized eased to 1.1% from 2.0% expected and 2.6% prior but the GDP Price Index inched higher to 4.0% on an annualized basis from 3.9% prior and 3.8% market consensus. Further, the Fed’s preferred inflation gauge, namely the Core Personal Consumption Expenditure (PCE) Price Index, for March matched 0.3% market forecasts and prior on MoM but rose to 4.6% from 4.5% expected on YoY, with an upwardly revised previous readings of 4.7%. On the same line, the US Employment Cost Index also increased by 1.2% in the Q1 2023, versus the 1% increase marked previously.

Against this backdrop, Wall Street managed to close on the positive side amid strong equity earnings while yields dropped and the US Dollar Index (DXY) closed the week with mild gains.

Moving on, a slew of top-tier US data and events are on the calendar that can fuel the market volatility. However, holidays at a few markets on Monday and a lack of major data in the UK may allow the GBP/USD to take a breather.

Also read: GBP/USD Weekly Forecast: Pound Sterling bulls regain control ahead of next week's key events

Technical analysis

A clear upside break of an upward-sloping resistance line from late April, now immediate support near 1.2555, enables the GBP/USD buyers to aim for May 2022 peak surrounding 1.2665.