“Against the euro, sterling has risen for five weeks on the bounce and lingers just under the €1.17 handle. Strong UK data this week could be enough to trigger a breakout north of this current resistance level.”
At the end of last week, the euro suffered a wave of “selling pressure” as traders “digested the dovish European Central Bank (ECB) meeting and favoured the cheap US dollar ahead of the Fed’s meeting”.
The expert added: “Amidst a lack of top-tier European data this week, investors will be focusing on the Fed’s rhetoric and how it compares to the ECB last week.
“The expectation is most major central banks will remain on hold from tightening monetary policy despite inflation worries, but a shift in policy stance could soon upend the calmness of financial markets at present.”