On February 2, the BoE is set to increase its benchmark interest rate by a half-point to 4%, but analysts will watch for signs that this will be the last time the BoE raises rates.
Cable could prove one of the more vulnerable USD pairs next week to USD strength if we see a combination of market complacency yielding to a bit more uncertainty (bad US data could prove bad news for risky assets on the impact on corporate earnings, and supportive of the USD, while stronger than expected US data could support the USD on repricing the forward Fed expectations back higher). Only a very gentle soft-landing scenario would seem able to keep the USD bears in business here. As well, we could see the Bank of England allowing itself to indulge in less hawkish guidance (to reduce their role in adding to the severity of the oncoming recession) after the recent sterling strength and decelerating inflation data.

Investors also expect the Fed to raise interest rates by 25bps next week. Apart from that, they will pay close attention to the nonfarm payrolls showing the state of the US labor market.
The daily chart shows GBP/USD trading near the 1.2401 resistance level. It also trades above the 22-SMA, indicating buyers are in charge. The RSI trades above 50, favoring bullish momentum. On the larger scale, the price is chopping through the 22-SMA, a sign that the price is caught in a sideways move. It is trading between the 1.1905 support and the 1.2401 resistance levels.