- The currency market’s activity is muted amid a calm period of summer volatility.
- Investors are awaiting the Fed’s central bank symposium in Jackson Hole.
- Markets are placing an 86% chance of the Fed maintaining its current stance.
Today’s GBP/USD price analysis is slightly bullish. On Wednesday, the US dollar relaxed after reaching a two-month high. Meanwhile, investors awaited the Federal Reserve chair’s upcoming speech for insights into the direction of monetary policy.
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Notably, the dollar index, gauging the US currency against six competitors, dropped by 0.145% to 103.44. However, it remained close to Tuesday’s peak of 103.71, reached just a day before. Furthermore, the index rose by 1.6% in August, on track to end a two-month losing streak.
The currency market’s activity is muted amid a calm period of summer volatility. Additionally, there is anticipation of the Federal Reserve’s central bank symposium in Jackson Hole, Wyoming, this week.
Investors will scrutinize his words meticulously to discern the course of the Fed’s monetary policy. Recent robust US economic data has eased concerns about an imminent recession. However, given that inflation remains considerably above the Fed’s 2% target, investors are cautious about the possibility of the central bank keeping rates elevated for longer.
Elsewhere, Richmond Fed President Thomas Barkin remarked that the Fed must remain open to the prospect of the economy regaining momentum.
The CME FedWatch tool indicated that markets are pricing in an 86% likelihood of the Fed maintaining its current stance. Nevertheless, the odds of the central bank raising interest rates once more by the end of the year have been increasing.
GBP/USD key events today
The US will release housing data that will show the state of the housing market. There will also be a report from S&P Global on the US services sector business activity.
GBP/USD technical price analysis: Price recovers amid consolidation.
On the charts, the pound is recovering but remains within a range with support at 1.2700 and resistance at 1.2800. Still, with the price above the 30-SMA and the RSI above 50, control belongs to the bulls.
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Therefore, the price will likely soon be retesting the range resistance. However, if the price is not ready to trend, bears will return to resistance to push it lower. On the other hand, a break above the resistance would signal the possible start of a bullish trend.
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