Pound Sterling trades back and forth ahead of BoE Pill’s commentary.

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• Pound Sterling trades back and forth ahead of BoE Pill’s commentary.
• High wage growth and service inflation keep the UK’s inflation sticky.
• The core PCE inflation data will guide further action in the US Dollar.

The Pound Sterling (GBP) is stuck in a tight range in Monday’s European session as investors need more insights on the Bank of England’s (BoE) interest rates for fresh action. The GBP/USD struggles for direction as uncertainty over the timing of rate cuts by the BoE and the Federal Reserve (Fed) continues to persist.

Policymakers from the BoE and the Fed are reluctant to offer details on the timing of rate cuts as they need more evidence to confirm that inflation will come down to the 2% target. The United Kingdom’s wage growth and service inflation are skewed to the upside, remaining inconsistent with the rate required to achieve price stability.

The US Dollar Index (DXY), which gauges the value of the US Dollar against six rival currencies, oscillates in a range around 104.00 amid a data-packed week. Investors will keenly watch the core Personal Consumption Expenditure price index (PCE) data for January, which will deliver a meaningful outlook on interest rates.

Pound Sterling trades inside Friday’s trading range as investors need fresh cues over the interest rate outlook. The broader outlook is sideways too as the pair oscillates in the Descending Triangle pattern formed on a daily timeframe. The aforementioned chart pattern indicates a sharp volatility contraction, carrying a slightly negative bias due to its formation of lower highs.

The horizontal support is plotted from December 13 low near 1.2500, while the downward-sloping border of the Descending Triangle pattern is placed from December 28 high at 1.2827. The pair holds above the 20 and 50-day Exponential Moving Averages (EMAs), which trade around 1.2630. Meanwhile, the 14-period Relative Strength Index (RSI) trades in the 40.00-60.00 region, indicating indecisiveness among market participants

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