- The GBP/USD price analysis points to further upside for the pound.
- Trump is exploring ways to remove Fed Chair Powell from office.
- Trump’s aggressive policies have clouded the outlook for the US economy.
The GBP/USD price analysis points to further upside for the pound as it rides the recent wave of dollar weakness. The dollar remained frail on Tuesday after dropping in the previous session due to Trump’s attacks on the Federal Reserve.
-Are you interested in learning about the forex indicators? Click here for details-
On Friday, reports surfaced that the US president was exploring ways to remove Fed Chair Powell from office. The news led to a renewed dollar sell-off, allowing the pound to resume its rally. Furthermore, Trump continued his attacks on Powell on Monday. The president demanded that the Fed Chair lower interest rates to support the economy.
The ongoing conflict between the government and the central bank has further eroded investor confidence. The volatile nature of financial markets has caused uncertainty. As a result, traders are dumping US assets for more stable ones. Trump’s attack on Powell shows he is ready to undermine the independence of the central bank.
Powell has maintained a cautious tone, calling for patience on rate cuts. Meanwhile, Trump’s aggressive policies have clouded the outlook for the US economy. Still, Powell wants to ensure that inflation does not rise before cutting interest rates.
GBP/USD key events today
Market participants do not expect any high-impact reports from the US or the UK. Therefore, they might wait on the sidelines for PMI data.
GBP/USD technical price analysis: Bulls pause for breath after 1.272 Fib break
On the technical side, the GBP/USD price is retreating after breaking past the 1.272 Fib extension level. Despite the pullback, the price remains well above the 30-SMA, with the RSI near the overbought region. Therefore, the bullish bias is strong.
–Are you interested in learning more about British Trade Platform Review? Check our detailed guide-
The pause might allow GBP/USD to retest the 1.272 Fib before climbing higher. It will also allow the SMA to catch up with the price, giving bulls the push they need to reach new highs. The next target is at a solid resistance zone comprising the 1.618 Fib extension and the 1.3500 key psychological level.
A break past this level will indicate solid bullish momentum. However, there is also a chance the uptrend will pause at this zone. Still, the bullish trend will continue if the price stays above the SMA.
Looking to trade forex now? Invest at eToro!
75% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.
Share
Saqib Iqbal
