- The British pound rose for the third day in a row.
- A mixed market mood and an empty UK economic docket were no excuse for sterling bulls to push the pair higher, courtesy of a weaker USD.
- GBP / USD has a bullish bias, although a daily close above 1.3600 would consolidate the pair’s chances of reaching 1.3700.
During the American session, the GBP/USD it rises above the psychological level of 1.3600, trading at 1.3618 at the time of writing. Market sentiment changed when Federal Reserve Chairman Jerome Powell testified against the US Senate Banking Committee on his new nomination to head the US central bank.
Federal Reserve politicians agree on a balance sheet reduction
An economic agenda absent from the United Kingdom that would be full on Friday left the GBP / USD at the mercy of the evolution of the US dollar.
Before Wal Street opened, three regional Federal Reserve presidents gave statements. Atlanta Fed Chairman Bostic said he “wrote three raises at the December meeting,” but as of today he anticipates that one more may be needed. On reducing the balance sheet as soon as possible, he agrees with the presidents of the Cleveland and Kansas City Fed, Loretta Mester and Esther George.
Jerome Powell, Chairman of the Federal Reserve, is crossing the wires at press time. So far, he said the Fed would use its tools to bring inflation closer to the central bank’s target and emphasize that the US economy no longer needs to accommodate. Powell further noted that the US central bank should focus more on inflation than the maximum employment target.
GBP / USD Price Forecast: Technical Outlook
GBP / USD is trending neutral to the upside, despite trading below the 200-day moving average (DMA), which sits at 1.3736, well above price. At press time, it is trading above 1.3600, a level last seen on November 11, 2021, a sign that opens the door for a test of the 1.3700 figure, although there would be some roadblocks along the way. upward.
The first resistance would be the daily pivot R2 at 1.3644. A breakout of the latter would expose the November 4, 2021 daily high at 1.3699, followed by the 200 WFD.