- GBP / USD was just below 1.40, but the rising momentum persists
- US PCE data is widely expected as price pressures begin to ease elsewhere
GBP/USD trades for the first time in five weeks from 1.40 as less nonsense Fed cancels already weakening dollar support. The pair was already on a stronger path after colliding with 23.6% Fibonacci retracement (1,3577) 20.th in July, when the pound rose sharply after noticing that there had been an increase in bear pressure on the back of the rising Covid-19 cases, leading to Freedom Day.
What seemed like a possible meeting of the Federal Reserve on Bulls on dusting on Wednesday could turn the pound-to-dollar / dollar recovery trade as the dollar rose slightly, but Fed Chairman Jerome Powell was once again a cooler of over-excitement. as he said, the labor market has still not shown significant progress in the recovery to start removing economic support, which has exacerbated the continued strong uptrend in GBP / USD. Today, the focus is on data released in the US, with the main focus on the PCE price index, as this is the Federation’s preferred method of measuring inflationary pressures. A stronger-than-expected figure could dampen the GBP / USD recovery, which is already starting to cool as investors wait for data in the afternoon.
GBP / USD per day schedule
The V-shaped collision we have seen in recent sessions has been able to make the momentum more positive, as the RSI has now risen to the 70th line. So far, there has been some resistance to raising GBP / USD above 1.3975, but this may be a pause for fresh air before the momentum continues to rise. What matters is whether the pair is able to consolidate above 1.40, as the region has had strong resistance in the past and is likely to continue to attract opponents.
Looking to the future, the Bank of England has a central place to play, as everyone looks to the central banks and how they present their views on the current state of the economy and future prospects.
– Written by Daniela Sabin Hathorn, Market Analyst
Follow Daniela on Twitter @HathornSabin