Key events today:

12:15 UTC: USD – ADP Nonfarm Employment Change.

18:00 UTC: USD – FOMC Meeting Minutes Release.

On Tuesday, the GBP/USD pair saw a brief upward movement before reversing southward, losing about a third of a percent and ending the day below the 1.2500 mark. Cable traders continue to struggle to find reasons for rate increases as the technical rebound weakens following a lackluster two-day bullish rise from nine-month lows near 1.2350.

The start of the new year has been unstable for the pound sterling on the charts, following a three-month streak of losses at the end of 2024. Trading momentum slowed near medium-term lows as traders have limited data to work with. UK retail sales rose to 3.1% year-on-year in December, but sterling flows failed to overcome a renewed wave of risk aversion after the U.S. PMI index and business spending survey results dashed near-term hopes of further Federal Reserve rate cuts at the beginning of 2025.

Wednesday’s U.S. news calendar will again be dominated by data releases, with the ADP December employment data and the minutes from the latest FOMC meeting set to be published during the upcoming trading session. ADP employment data provides a shaky preview of what Friday’s nonfarm payroll (NFP) data might look like, and investors will be watching for any glimmer of hope for rate cuts by June.

Recommendations: Primarily sell orders from the current price level.