The US unveiled better-than-expected preliminary GDP and positive change in employment. Besides, the unemployment rate remained at record low. Though the UK Official Bank Rate report was published unchanged, the BREXIT effect has been the louder than Bank of England's policy meeting recently.

The UK has a smaller chance of a rate hike this year. Bank of England Governor Mark Carney said on Thursday investors were underestimating how many interest rates could rise, even as the British central bank kept borrowing costs on hold due to Brexit uncertainty. Britain's economy has slowed since the Brexit referendum in 2016 but has coped better than many investors feared. Unemployment is at a 44-year low, wages are growing at the fastest pace in 10 years and consumer spending remains solid. After thorough observation of better prospects of the global economy, the BoE upgraded its forecast of economic growth in the world's fifth-largest economy to 1.5 percent, up from the decade-low 1.2 percent it predicted in February.

The UK GDP report is due Friday this week, which is expected to decrease to 0.0% from the previous value of 0.2%. So, GBP is expected to display volatility and weakness if the expectations are met. Moreover, Manufacturing Production is expected to drop as well to 0.1% from the previous value of 0.9% and Prelim GDP is expected to expand to 0.5%.

On the other hand, despite the positive employment change in the US, USD is struggling to maintain its gains over GBP. In the latest nonfarm payrolls, the unemployment rate report edged down to 3.6% which was expected to be unchanged at 3.8%, Non-Farm Employment Change was published with increase to 263k from the previous figure of 189k which was expected to decrease to 181k and Average Hourly Earnings report was published unchanged at 0.2% which was expected to increase to 0.3%.

According to Fed officials, the US central bank may need to cut interest rates if consumer inflation is stuck low failing to reach the target level around 2%. The Federal Reserve's policymakers fear they are ill-equipped to battle the next recession under their current inflation-targeting approach. This year they are well into an effort to vet new strategies for managing interest rates under the conditions of muted inflation and low borrowing costs. This week, US CPI report is going to be published on Friday which is expected to be unchanged at 0.4% and Core CPI is expected to increase to 0.2% from the previous value of 0.1%.

To sum up, this week is going to be turbulent amid a series of macroeconomic reports from the UK which are expected to be rather weak. However, any positive reading which is unlikely, may reinforce bullish gains. On the contrary, USD has found support from positive reports recently can regain momentum over GBP again.

Now let us look at the technical view. The price is currently retracing towards 1.3050-1.3100 area after breaking it recently with a strong impulsive daily close. The impulsive bullish pressure had confluence along the way, so any price correction may reinforce bullish momentum above 1.3050 area. A daily close below 1.3050 could trigger a strong counter-move to the recent bullish pressure and encourage further the bearish pressure with a target towards 1.2800. Otherwise, if the price remains above 1.3050, the bullish bias could push the price higher towards 1.3400 resistance area in the future.