GBP/USD continues undulation in 1.3500-1.3550 ranges ahead of Fed/BoE speak and key UK/US data

• GBP/USD is consolidating with 1.3500-1.3550 intra-day ranges ahead of a busy week of central bank speak and US/UK data.
• Ahead of risk events, the pair may continue undulations in the 1.3500-1.3600 range around a key fib level for 2022.

GBP/USD is trading broadly flat at the start of the week within a 1.3500-1.3550 intra-day range, as traders brace for a barrage of further central bank speakers as well as UK and US tier one data releases. After rallying as high as the 1.3620s last week as a result of a weakening US dollar plus a hawkish BoE surprise, the pair reversed back below 1.3550 in wake of a much stronger than expected US labour market report. January’s jobs data has pumped expectations for a 50bps first rate hike from the Fed in March, overshadowing calls from a large minority of BoE members for a 50bps move last week.

Fed tightening bets, which support the dollar last Friday, maybe pumped once again if Thursday’s US Consumer Price Inflation report also comes in hotter than expected. Fed policymakers speaking this week should be monitored just in case there is any push back against recent hawkish market moves. That could help push GBP/USD back towards last week's highs above 1.3600. Otherwise, GBP/USD traders will be monitoring a speech from BoE Governor Andrew Bailey on Thursday ahead of the release of Q4 2021 GDP growth figures and December activity data on Friday.

Technical levels of note include the 1.3550 mark, which is the 50% retracement back from the 2022 highs at 1.3750 and lows at just above 1.3350. As markets weigh Fed/BoE tightening themes, the pair may continue to undulate in the 1.3500-1.3600 area in the coming days. One theme worth keeping an eye on is Boris Johnson’s ongoing will he/won’t he stay on as UK PM saga, as the PM continues to face massive pressure in wake of a string of recent scandals. Most analysts continue not to see a Johnson departure as mattering too much for sterling given the candidates most likely to replace are unlikely to herald much by way of economic policy change.