- The pound maintains an upward trend against the dollar.
- GBP / USD has the highest daily close in two months above 1.3600.
- Following a hearing by the Fed chairman, the focus shifts to US inflation data.
The GBP / USD is trading around 1.3630, virtually unchanged from Tuesday’s close. The pair reached the lowest level of the day at 1.3620, after having reached 1.3645 in Asian hours, the highest in two months.
The advance of the pair occurs before some weakness of the dollar in the market, with the yields of the Treasury bonds stable and rises in the equity markets. If the good tone continues and GBP / USD over 1.3600, the bullish bias will remain intact. A return below 1.3600 would ease the upward pressure on the pair, while the next support is at 1.3560 and 1.3515.
The focus shifts to US inflation data.
The exhibition of Jerome Powell gave more momentum to equity markets. Although the chairman of the Federal Reserve stated that he will do everything possible to prevent inflation from spiraling out of control, I anticipate a long road to normalization of monetary policy.
Futures on the major Wall Street indices are showing modest gains added to Tuesday’s gains. In londres, the FTSE 100 rises 0.68% and reached the highest level in two years.
Inflation data from China less than expected. Now the focus shifts to the retail inflation data that will be published in the US at 13:30 GMT. The market consensus is for a rise of 0.4% (monthly) and 7% compared to 12 months ago. These figures can influence monetary policy expectations.
At United KingdomWith no data for these days, Friday will be the strong day with growth and industrial production figures, among others. In a few hours, Prime Minister Boris Johnson will be in Parliament answering questions from legislators, who have gained greater expectations after new events in the saga of events at the official residence. Although there shouldn’t be a huge impact on the pound.
Technical levels
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