April 29 (Reuters) - Sterling was among the outperformers in the G10 space to kick off the week though the 200-DMA (1.2556) has hindered further upside for now with a plethora U.S. risk events ahead.

The week's schedule is highlighted by a Federal Reserve decision on Wednesday and a non-farm payrolls report due Friday.

While market expectations are for no notable changes to Fed’s policy statement, the rhetoric is likely echo Chair Jerome Powell’s recent message that the U.S. central bank may have to wait longer to gain confidence on inflation and thus rates will need be left unchanged.

At the same time, it will be important to closely monitor the nuances of Powell’s press conference and whether the Fed chair leaves the door ajar for a rate hike should data warrant, much like NY Fed President John Williams recently indicated. If so, this would mark notable change in stance and likely weigh heavily on GBP/USD, opening the door for a retest of the 2024 low at 1.2299.

On the crosses, while weakness in EUR/GBP has also contributed to the recovery in cable, support at 0.8500 has put a floor under the cross since August 2023. This looks as though it will continue given EU/GB rate differentials are narrowing slightly.

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(Justin McQueen is a Reuters market analyst. The views expressed are his own.)

((justin.mcqueen@thomsonreuters.com))