- The pound fell after Queen Elizabeth’s death.
- Powell reiterated the Fed’s commitment to taming inflation.
- The UK could face a balance of payments crisis due to the fall in sterling.
The GBP/USD outlook fell against the dollar following the death of Queen Elizabeth, who had ruled the UK longest and served as its symbol for seven decades.
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Commenting at a Cato Institute conference, Powell explained that the Fed is “fully committed” to bringing inflation down and must keep working until the job is done.
“I’m not convinced the dollar’s highs are in yet,” said Marc Chandler, chief market strategist at Bannockburn Global Forex in New York.
“Powell hasn’t added anything new to what he said in Jackson Hole or what (Fed Vice Chair Lael) Brainard said yesterday, but I expect the dollar to return ahead of the CPI next week ) will consolidate,” he added.
According to US interest rate futures, there is an 87% chance the Fed will hike rates another 75 basis points at its meeting this month, taking the Fed’s interest rate range to between 3.0% and 3.25%.
The depreciation of the pound against the dollar to levels last seen in 1985 has raised concerns of a sharp fall in the value of British assets and a balance of payments crisis. Sterling has lost nearly 10% of its value since early June. It fell below $1.15 again on Thursday.
Key GBP/USD events today
The Commodity Futures Trading Commission’s weekly Commitments of Traders report provides an overview of the net sterling positions held by speculative traders in the US futures markets.
GBP/USD Technical Outlook: Bulls are eyeing 1.16025 resistance level
The 4-hour chart shows price trading above the 30-SMA and the RSI above 50, indicating strong bullish momentum. Sellers were responsible for this market and were able to push the price below 1.14506. However, buyers took the lead showing that the 1.14506 level was a strong support.
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Since then, the price has broken out above the 30-SMA with bulls creating strong bullish candles. If the price successfully retests the 30-SMA and pushes further higher, it is likely to break above the 1.16025 resistance and start making higher highs and higher lows.
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Saqib Iqbal ![]()
Saqib Iqbal is a market analyst, prop fund trader and mentor serving the industry with his analysis and educational content since 2011. The author has extensive experience with various financial markets and institutions. He is known for his day trading reviews and multiple time frame analysis.
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