Forex GBPUSD News

Pound Reacts Negatively to Fed Chair Powell’s Testimony

Pound Reacts Negatively to Fed Chair Powell's Testimony

The pound has come under pressure against the dollar as markets react to the more aggressive guidance given by Fed Chair Jerome Powell during his testimony in front of the Senate Banking Committee. The USD found support against all major currencies, including the GBP, outweighing any upside from positive UK economic data releases, such as housing and retail sales.

The US theme is expected to continue to dominate the trading session, with markets eagerly awaiting the ADP report and Fed Beige Book. Expectations for the ADP employment change are favoring a higher print, which will only heighten the comments made by Fed Chair Powell and reiterate the tight labor market conditions in the US.

From a UK perspective, there are no noteworthy economic data releases ahead of Friday’s GDP release, leaving the pound vulnerable to further dollar strength.

Bearish Sentiment for GBP/USD

The daily GBP/USD chart shows price action in limbo, awaiting further fundamental data. After breaking below the psychological level of 1.1900, the 200-day SMA, and wedge support, bears now eye the 1.1738 swing high as support. The Relative Strength Index (RSI) indicates that the pair has more room to fall before entering oversold territory, but remains highly dependent on incoming data.

Key Resistance and Support Levels for GBP/USD

Key resistance levels for the GBP/USD pair include 1.2000 and 1.1900/200-day SMA, while key support levels include 1.1738 and 1.1500.

Bearish IG Client Sentiment for GBP/USD

IG Client Sentiment Data (IGCS) shows that retail traders are currently LONG on GBP/USD, with 72% of traders currently holding long positions (as of this writing). However, we typically take a contrarian view to crowd sentiment, which suggests that GBP/USD prices may continue to fall. The combination of current sentiment and recent changes gives us a stronger GBP/USD-bearish contrarian trading bias.

Focus on US Economic Data Releases

As markets continue to focus on US economic data releases, upcoming inflation and Non-Farm Payrolls (NFP) data could cool down expectations if they miss forecasts and may give the pound some upside support. For now, however, the focus remains on the US and how economic data releases will impact the dollar and other major currencies.

Alice Scott is a prolific author with a keen interest in the stock market. As a writer for, she specializes in covering breaking news, market trends, and analysis on various stocks. With years of experience and expertise in the financial industry, Alice has developed a unique perspective that allows her to provide insightful and informative content to her readers.