GBP/USD: Pound testing 1.3900 ahead of Fed Brainard speech

• Cable remains steady near 1.3900. 
• Fed Brainard speech at 22.30 GMT.
• The US Non-Farm Payrolls on Friday is expected to come out at 200K. 

The GBP/USD has traded higher on Tuesday and is now trading at 1.3890 up 0.50% on the day. The Dollar is under pressure with Trump’s proposal on tariffs for iron and aluminum last Thursday. 

For the British Pound, March 22 is likely to be a key date with the European summit expected to bring some conclusion to the trade deal between the European Union and the United Kingdom. Market participants will likely expect some volatility around this event. Coming up next in the UK down the week is the January industrial production and trade figures on Friday. Earlier on Tuesday, the BRC retail sales came out better than expected at 0.6% vs 0.4%.

The major market mover for the greenback this week is most likely the US Non-Farm Payrolls on Friday. It is expected to come out at 200K. Wednesday will see the ADP Employment data at 13:15 GMT and the Trade balance and Labor cost figures at 13:30 GMT. Later today,  the Fed Governor Lael Brainard is scheduled to deliver a speech called "Economic and Monetary Policy Outlook" at New York University's Money Marketeers event at 22.30 GMT.

On Tuesday, Factory orders declined 1.4 percent in January, in line with expectations and largely confirming the cooling trend hinted in last week’s durable goods report, explained analysts at Wells Fargo.

Technical outlook

The Cable is forming a triangle pattern on the daily chart and has tested the 50% Fibonacci retracement level at 1.3900. A bull continuation move above 1.3900 could lead to the next resistance level at the 38.2% Fibonacci retracement at 1.4000 psychological level. However if 1.3900 caps the bears, it could drive the market back down to the 61.8% Fibonacci retracement at the 1.3800 level and possibly all the way down to 1.3650 which is the 78.6% Fibonacci retracement. 

GBPUSD daily chart