Key events today:

12:15 UTC: USD – ADP Non-Farm Employment Change.

14:00 UTC: USD – ISM Services PMI.

This week, ahead of Friday’s NFP release, labor and wage data from the US will dominate the market focus.

On Tuesday, the pound/dollar pair traded slightly south of the 1.2700 level, holding back rate increases as sterling traders contend with a lack of significant economic data from the UK. Meanwhile, broader markets prepare for the upcoming release of the US Non-Farm Payrolls (NFP) data at the end of the week.

Bank of England (BoE) Governor Andrew Bailey is set to speak early Wednesday. The UK central bank’s head will deliver a pre-recorded interview at a conference organized by the Financial Times. Nothing groundbreaking is expected from his speech, but GBP traders will keep a close ear out for any notable remarks.

On Wednesday, the ADP Non-Farm Employment Change report is due, expected to drop to 150,000 from the previous 233,000. During the US trading session, investors will also receive the ISM Services PMI report, with November’s results expected to decline to 55.5 from 56.0 the prior month.

Also on Wednesday, Federal Reserve Chair Jerome Powell is scheduled to speak. The Fed chief will answer questions from the audience during a discussion organized by the New York Times.

Recommendations: Watch the 1.2700 level closely. If it breaks below, consider Sell positions; if it rebounds, look for Buy opportunities.