- GBP/USD bullish on charts with firm rebound after Fed Chair Powell’s comments.
- Initial jobless claims in the US exceeded expectations, contributing to improved investor sentiment and the decline in the dollar.
- Several Fed officials are still scheduled to speak before the close of the trading week.
GBP/USD rose to an intraday high of 1.2192 on Thursday after softer comments from Federal Reserve (Fed) Chair Jerome Powell dropped sharply on the US Dollar (USD), leading the broad Dollar Index (DXY) lower and giving the British Pound (GBP) a much-needed boost, extending a bounce from the day’s early lows near 1.2090.
Fed Chairman Jerome Powell maintained a notably moderate tone in his appearance at the Economic Club of New York. Chairman Powell spoke of the relative strength of the US economy going forward, as well as a nod to the fact that pressure on the Fed to raise rates further appears to be easing, sending the dollar lower in overall, as investors welcomed the prospect of easing rate pressures going forward, with market sentiment pushing firmly into risk territory.
Several Federal Reserve officials are scheduled to give speeches in the next 24 hours before the US central bank enters the “blackout” period ahead of the next monetary policy meeting and subsequent rate request.
Heading into Friday, the Pound will close the week with the release of UK retail sales data. Most forecasts point to a decline in September retail sales, with negative growth of -0.1% versus a 0.4% increase in August.
GBP/USD Technical Outlook
Despite Thursday’s Fed-driven bullish rally, the GBP/USD pair remains firmly entrenched in the bearish zone on daily candles; The pair has failed to generate a sustained bullish move since plunging to 1.2037 at the beginning of the month, with the latest bullish move failing to achieve a significant breakout of the 1.2300 zone.
GBP/USD remains bearish, with the 50-day and 200-day SMA marking a bearish crossover near 1.2450.
A bearish continuation would see the British pound challenge the 2023 lows at 1.1800, while a bullish recovery would have to come first and extend from the key 1.2300 level as the 50-day SMA is set to fall on the stock. price and add technical resistance.
GBP/USD Daily Chart
GBP/USD Technical Levels
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
