GBP/USD Trading Overview
- GBP/USD trades comfortably above 1.3400 in the European session on Monday.
- The technical picture suggests that the bullish bias remains intact.
- Markets await Fed Chairman Powell’s speech on the economic outlook.
GBP/USD witnessed slight losses on Friday but concluded the second consecutive week in positive territory. The pair maintains its position early Monday, trading above 1.3400.
British Pound PRICE Last 7 days
The table below displays the percentage change of the British Pound (GBP) against major currencies over the last 7 days, with GBP showing strength against the US Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.30% | -0.63% | -0.98% | -0.34% | -1.73% | -1.94% | -0.82% |
Analysis: The British Pound has shown resilience against the US Dollar, with a positive trend over the past week.
The selling pressure on the US Dollar at the start of the week has supported GBP/USD’s upward movement. Recent data from the US Bureau of Economic Analysis indicated a slower-than-expected rise in the core Personal Consumption Expenditures (PCE) Price Index for August.
On the UK side, the Office for National Statistics revised down the annualized GDP growth for Q2, but this had limited impact on the market.
Market Expectations
Federal Reserve Chairman Jerome Powell is scheduled to address the economic outlook today at the National Association for Business Economics Annual Meeting, with market participants anticipating potential insights into future monetary policy decisions.
The CME FedWatch Tool indicates a 50% likelihood of a 25 basis points rate cut at the next policy meeting in November, posing a dual risk for the US Dollar. GBP/USD could experience fluctuations based on Chairman Powell’s comments.
GBP/USD Technical Analysis
GBP/USD is currently within an ascending regression channel from September 12, supported by the Relative Strength Index (RSI) indicator pointing to a bullish sentiment.
Key resistance levels include 1.3440, 1.3500, and 1.3520, while support levels are at 1.3375, 1.3330, and 1.3300.
Fed FAQs
For those new to financial markets, here are some frequently asked questions about the Federal Reserve:
- Monetary Policy: The Fed’s primary goals are price stability and full employment, achieved through interest rate adjustments.
- FOMC Meetings: The Federal Open Market Committee assesses economic conditions and makes policy decisions at eight annual meetings.
- Quantitative Easing (QE): A crisis measure where the Fed increases credit flow by purchasing bonds, typically weakening the US Dollar.
- Quantitative Tightening (QT): The reverse of QE, where the Fed reduces bond purchases, often strengthening the US Dollar.
Understanding these concepts can provide insights into the Fed’s impact on currency markets and economic conditions.