Important events today:

07.01 13:15 UTC: USD – ADP Employment Change

GBP/USD is trading around 1.3510, maintaining the pound’s strength after a strong start to the week. The British currency is supported by improved investor sentiment and reduced concerns about the sustainability of the UK’s fiscal policy, which lessens the additional risk premium in the pound’s price.

Another factor is the interest rate differential: UK rates remain relatively high, so the demand for pound trades based on yield differentials supports the pound amid a calm market environment. The market is also closely watching political signals about possible closer economic ties between the UK and the European Union — such expectations improve mid-term prospects for capital inflows.

In the short term, the key source of sharp fluctuations for the pair is the US employment data and the Fed’s signals about the future trajectory of interest rates. If the statistics indicate an economic slowdown, the dollar could weaken, allowing GBP/USD to stabilize above current levels. Stronger figures, on the other hand, could revive demand for the dollar and trigger a pullback in the pound.

Recommendation: BUY 1.3515, SL 1.3485, TP 1.3605