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 Cable Correcting LowerGBPUSD has pulled back below the 1.2832 level this week and is on course to end the week in the red, despite some better data along the way. The uptick in USD has squashed any bullish momentum in the Pound, which had previously broken out to its highest level against the Dollar since July last year.  
 BoE in FocusIn terms of UK developments, better than forecast GDP this week was seen adding to the list of recent UK data-strength. On the back of a more encouraging set of inflation and growth projections laid out by the UK government at the recent spring budget meeting, the outlook has been more bullish for GBP recently. Traders are forecasting the BoE to cut rates in August, a little later than currently pegged for the ECB and Fed, which has been fuelling upside in GBP against EUR and USD. However, a shift in the USD outlook this week has undone some of that rally. Next week, traders will be looking to see whether the bank offers any timing signals around projected easing. If seen, this should be bearish for GBP near-term while an absence of clarity will be seen as a bullish signal for now.
 Shifting USD ViewOn the back of both CPI and PPI coming in above forecasts, and yet another strong NFP release, USD has been rallying this week on the view that the Fed will stick to its guns on keeping rates higher for longer when it meets next week. While policymakers continue to project rate cuts this year, clarity over timing has been lacking and with labor and inflation data remaining strong, risks of a hawkish revision to rate forecast are growing.
 BoE Vs FedThe outlook for GBPUSD next week will depend firmly on the extent to which Fed pushes back against near-term rate expectations and whether we get any timing signals from the BoE. Given the current market dynamic, risks look skewed towards a bearish GBPUSD outcome by the end of the week.
 Technical ViewsGBPUSD The rally above 1.2832 looks to have been a false breakout for now, with risks of a deeper reversal growing while we hold back below the level. Bearish momentum studies readings keep the focus on further downside for now with a retest of the broken bear trend line and the 1.2612 level the next support area to watch. More By This Author:Bitcoin Commentary – Friday, March 15US Dollar Commentary – Friday, March 15Iron Ore Commentary – Thursday, March 14