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GBP/USD:FUNDAMENTALS+TECHNICAL ANALYSIS | SHORT SCENARIO | 🔔

Short
FX:GBPUSD   British Pound / U.S. Dollar
GBP/USD has started to edge lower in the early European session.
The pair could face renewed bearish pressure if 1.3100 support fails.
Risk perception is likely to be the primary market driver on Monday.
The British pound has started the new week in a calm manner but has started to inch lower toward 1.3100 in the early European session. The technical outlook points to a bearish tilt in the short term and sellers could take action in case 1.3100 support fails.

The cautious market mood early Monday is making it tough for the British pound to gather strength. The UK's FTSE 100 Index is trading flat and the US stock index futures are posting small losses.

The west is reportedly looking to ramp up sanctions against Russia on accusations of Russia having committed war crimes during the military offensive near Kyiv. This development could be assessed as a factor that might make it difficult for Ukraine and Russia to find a diplomatic solution.

On Saturday, one of the negotiators for Ukraine said that they made enough progress to set up a meeting between Russian President Vladimir Putin and Ukrainian President Volodymyr Zelensky to discuss a peace agreement. Nevertheless, investors remain sceptical and risk-sensitive assets stay on the back foot.

There won't be any high-tier data releases from the US in the second half of the day and GBP/USD could find it hard to regain its traction unless risk flows return to markets.

In the meantime, the dollar continues to capitalize on rising odds of a 50 basis points Fed rate hike in May following Friday's upbeat jobs report and hawkish Fed commentary.

Nonfarm Payrolls in the US increased by 431,000 in March and the Labor Force Participation rate improved modestly to 62.4% from 62.3%. More importantly, wage inflation climbed to 5.6% on a yearly basis from 5.2% in April. Over the weekend, San Francisco Fed President Mary Daly noted that the case for a double-dose rate increase in May had grown unless there were negative surprises in data until the next meeting.
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