After the UK revealed higher-than-expected inflation statistics, the GBP/USD has started recovering. It’s possible that the most recent move was a dead-cat bounce. After the US CPI and a mild bond auction, FXStreet’s Analyst Yohay Elam explains that Fed Chair Powell’s testimony is left, right, and center.
“The Federal Reserve Chair, Jerome Powell, is in charge of the following steps. A dovish stance would mean a postponement of the bank’s $120 billion-per-month bond-buying program. Powell, on the other hand, may take note of the recent strong Nonfarm Payrolls report and consider higher prices as more likely to persist, increasing the likelihood of a taper announcement. This would give the dollar a boost.”
“On both sides of the Atlantic, the Delta covid variety continues to expand. In the UK, daily cases have reached 34,000, and in the US, they have more than doubled in the last fortnight. Even if the UK is poised to reopen on Monday, there are concerns regarding the long-term viability of such a move. If the number of instances in America continues to rise, the dollar’s status as a safe haven may improve.”
“The daily low of 1.38 provides support, followed by 1.3750 and 1.3730, which have recently functioned as support.”
“At 1.3840, there is some resistance, which held cable down last week. The weekly high, 1.3905, is followed by the tenacious 1.3905 line. Above there, 1.3935 is the next level to keep an eye on.”/n
