Market sentiment continues to ride high, buoyed by persistent expectations of a Federal Reserve rate cut in the June policy meeting. This sentiment found reinforcement after the release of the US Employment report last Friday, which revealed softened wage growth coupled with a higher Unemployment Rate.

The US Dollar embarked on the week with a subtle uptick yet refrained from making significant waves on Monday. However, what lies ahead promises a potentially decisive turn as the greenback braces itself for a data-rich narrative with a conspicuous absence of US Federal Reserve officials on the speaking roster. The onset of the Fed's blackout period ahead of the rate decision and Chairman Jerome Powell's forthcoming speech imbue the week with an air of anticipation and speculation. 

On the technical side, the dollar downside may not have run out of steam yet as sellers may push the price lower, aiming to test the support level at 102 points since in this area a major support line is located:

On the economic calendar, pivotal moments loom large on Tuesday, Thursday, and Friday. Foremost among these is the unveiling of the US CPI on Tuesday, where any decline in inflationary metrics could catalyze a reshuffling of market expectations, possibly bringing forward the much-anticipated rate cuts from the Fed. Adding intrigue to the mix are the imminent releases of the US PPI numbers and Retail Sales figures on Thursday, setting the trajectory for the greenback's trajectory by week's end.

According to the federal funds rate futures, market sentiment overwhelmingly favors a Fed pause in the March 20 meeting, with expectations standing at 96%, while the probability of a rate cut lingers at a mere 4%. 

Across the Atlantic, the Pound Sterling grapples with moderate pressure in Monday's late European session, as uncertainty pervades the atmosphere ahead of a data-heavy week. The GBP/USD pair encounters downward pressure in anticipation of key economic releases in the United Kingdom, including Employment and monthly GDP reports scheduled for Tuesday and Wednesday, respectively.

Of particular interest in the UK labor market data is the trajectory of job growth and wage dynamics, which have served as pivotal factors in shaping inflationary pressures. Persistent wage growth could potentially push back market expectations for BoE rate cuts, potentially deferring them until the August meeting. Despite BoE policymakers' assurances regarding inflation converging to the 2% target by summer's end, concerns linger over its resurgence thereafter. 

The technical picture of GBPUSD indicates that after the price broke through the key resistance line (the breakout of the 1.27 level), the pair drew great interest from buyers and gathered more upside momentum. Medium-term buyers will likely target more important levels, like 1.30 or the area near the level, before they start to claim profits. That’s why upside potential may not be exhausted yet: