After a volatile start to the week, the British pound has stabilised, with the GBP/USD and GBP/CAD pairs entering a consolidation phase. Investors are locking in profits following a recent bullish surge, as they await the release of key US labour market data, which could determine the direction of trading in the coming sessions.

Today, preliminary employment figures from ADP are expected, while tomorrow, market participants will focus on the US Non-Farm Payrolls report for June. The forecast anticipates an increase of 120K new jobs (below May data), with a slight rise in the unemployment rate to 4.3%. Additionally, markets will receive figures on jobless claims and average earnings. Any deviation from expectations could significantly impact Federal Reserve interest rate outlooks for the second half of the year.

Political factors are also influencing the market: pressure from Donald Trump on the Federal Reserve leadership has intensified once again. The White House has reportedly sent Jerome Powell a list of global central bank interest rates, with notes suggesting that US rates should be lower than their current levels. These remarks have heightened investor concerns about the Federal Reserve's independence and fuelled speculation over potential policy easing.

In the coming sessions, the main driver for the currency market will remain the assessment of the US labour market's health and commentary from Fed officials. Signs of an economic slowdown could trigger further dollar weakness and lend short-term support to the pound.

GBP/USD

The GBP/USD pair is trading just above 1.3700, consolidating near the 2021 highs. Steady demand for the pound is coupled with dollar softness ahead of major data releases. Technical analysis suggests a possible test of key resistance at 1.3800. A downward correction may begin if the pair falls decisively below 1.3630.

Key data that could influence GBP/USD movements:

• Today at 15:15 (GMT+3): ADP US Non-Farm Employment Change
• Tomorrow at 11:30 (GMT+3): Bank of England Credit Conditions Survey
• Tomorrow at 11:30 (GMT+3): UK Services PMI
• Tomorrow at 15:30 (GMT+3): US Average Hourly Earnings

GBP/CAD

The GBP/CAD pair has strengthened to 1.8700 and maintains bullish momentum amid anticipation of Canada’s trade balance data. If Canadian data disappoints, GBP/CAD could continue its rally towards the 1.8800 mark.

Key data that could influence GBP/CAD pricing:

• Today at 15:30 (GMT+3): Canada Manufacturing PMI
• Today at 17:30 (GMT+3): US Crude Oil Inventories
• Tomorrow at 15:30 (GMT+3): US Initial Jobless Claims
• Tomorrow at 15:30 (GMT+3): Canada Trade Balance

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